Hospitals & Medicaid: Adapting to Changing Rules

Hospitals Brace for Medicaid Overhaul: Navigating the Challenges of the One Big Beautiful Bill Act

The healthcare industry is bracing for notable changes to Medicaid under the newly enacted One Big Beautiful Bill Act (OBBBA), signed into law on July 4th. Hospitals that serve medicaid patients must proactively update their eligibility and billing systems to mitigate financial risks and ensure a smooth transition, as the reforms reshape eligibility criteria, reimbursements, and the demand for charity care.

The OBBBA, officially known as H.R. 1, brings sweeping shifts not only to Medicaid but also to Medicare and Affordable Care Act (ACA) marketplace plans. According to a recent industry survey, over half of healthcare providers anticipate moderate to high risk to their Revenue Cycle Management (RCM) performance as an inevitable result of these changes.

The Financial Tightrope for Hospitals

The reforms embedded within the OBBBA are expected to increase financial risk for hospitals. One key concern is the potential for rising uncompensated care costs. The Congressional Budget Office (CBO) estimates that providers will shoulder $36 billion in uncompensated care by 2034, with safety-net and rural organizations bearing the brunt of the impact. Operating margins could also be significantly affected,potentially decreasing by as much as 17% for systems with a median $1 billion to $2 billion in net operating revenue by 2028.

“Hospitals are facing a complex landscape,” stated a senior official familiar with the legislation. “The combination of potential reimbursement decreases, increased self-pay volumes, and stricter eligibility requirements creates a perfect storm of financial challenges.”

Key Changes to Medicaid Under the OBBBA

Several specific changes outlined in the OBBBA will directly impact hospitals:

• More Frequent Eligibility Checks: Beginning in 2027, states will be required to conduct automated eligibility checks every six months for adults covered under ACA Medicaid expansion, with quarterly cross-checking against federal databases to identify ineligible or deceased enrollees.
• Moratorium on Federal Rules: The OBBBA pauses the implementation of previous federal rules designed to streamline enrollment in Medicaid and the Children’s Health Insurance Program (CHIP).
• Increased Coverage Verification: The act emphasizes the importance of accurate insurance coverage, having identified over $60 billion in coverage across 45 million cases in 2024. Moreover, solutions like Experian Health’s Patient Access Curator™ (PAC) and AI Advantage™ can ensure accurate patient facts and cleaner claim submissions.
• Support Patient Payment Readiness with Estimates and Transparency: As an estimated 10 million people may lose Medicaid or CHIP coverage by 2034, providing accurate estimates and transparent pricing is paramount. Solutions like Experian Health’s Patient Estimates generate real-time estimates using up-to-date payer contracts and fee schedules. Self-service payment portals, such as PatientSimple®, offer patients convenient access to personalized estimates.
• automate Charity Care: With potential increases in patient need for financial assistance, automating charity care screening is essential. Tools like Patient Financial Clearance can identify patients who may qualify for charity care and recommend appropriate payment plan options.

“Automating these processes isn’t just about efficiency; it’s about ensuring patients receive the care they need while minimizing financial burdens for both patients and providers,” noted one analyst.

A Flexible, Technology-First Approach is Key

The OBBBA ushers in a period of rapid evolution for Medicaid policies. Hospitals must adopt a flexible, technology-first approach to bolster their revenue cycle management processes and minimize financial risks. Scalable, automated solutions are essential for ensuring accurate eligibility verification, reducing uncompensated care, and enabling patients to better understand their financial obligations. With the right tools in place, hospitals can navigate the challenges of the OBBBA and continue to provide vital care to their communities.

Find out how Experian Health is helping hospitals prepare for Medicaid reforms by modernizing eligibility checks and reducing exposure to revenue loss.

Source:

1. Experian Health – OBBBA 2025 Research. Quantitative survey of 200 healthcare professionals responsible for financial, billing and RCM decisions. This survey was conducted in October 2025.