Navigating the Financial Fallout

The passage of H.R. 1, also known as the “One Big Beautiful Bill Act,” marks a significant shift in the U.S. healthcare landscape, particularly for Medicaid. With sweeping changes to eligibility, enrollment, and cost-sharing, the legislation is expected to increase the number of uninsured individuals—posing a serious financial challenge for healthcare providers. As Medicaid coverage becomes more difficult to maintain, providers must act swiftly and strategically to prevent a surge in uncompensated care and bad debt.

Understanding the Impact of H.R. 1 on Medicaid

H.R. 1 introduces several provisions that tighten Medicaid eligibility and increase administrative burdens on both patients and states. These changes are expected to disproportionately affect low-income populations and those with unstable employment or housing situations.

1. Mandatory Work Requirements

By the end of 2026, states are required to implement work and community engagement requirements for certain Medicaid enrollees. Unlike previous policies, these requirements cannot be waived under Section 1115, though temporary exemptions may be granted. This change is likely to result in coverage losses for individuals who struggle to meet reporting obligations or who work in informal or seasonal jobs.

2. Frequent Eligibility Redeterminations

States must now conduct eligibility redeterminations every six months for Medicaid expansion populations. This increased frequency raises the risk of “administrative churn,” where eligible individuals lose coverage due to paperwork errors, missed deadlines, or lack of awareness.

3. Stricter Verification Processes

New address verification and documentation requirements will make it harder for individuals to maintain continuous coverage. These rules are particularly burdensome for people experiencing housing instability or language barriers.

4. Reduced Coverage for Immigrants

H.R. 1 narrows the definition of “qualified” immigrants, excluding refugees, asylees, and other humanitarian groups from Medicaid and CHIP eligibility. This change will leave many vulnerable individuals without access to affordable healthcare.

5. Mandatory Cost-Sharing

Beginning in 2028, states must impose cost-sharing for Medicaid expansion adults with incomes above 100% of the federal poverty level. This could deter patients from seeking care or lead to unpaid medical bills.

The Financial Risk for Providers

These policy shifts are expected to increase the number of uninsured patients and reduce Medicaid reimbursements. Providers—especially safety-net hospitals and community health centers—face the dual challenge of delivering care to vulnerable populations while managing rising levels of uncompensated care. Without proactive measures, bad debt and uncompensated care could significantly impact financial stability and service delivery.

Proactive Strategies to Prevent Bad Debt and Uncompensated care

To mitigate these risks, healthcare providers must adopt a multi-pronged approach that combines patient support, operational efficiency, and community engagement.

1. Enhance Eligibility and Enrollment Support

Providers should invest in real-time eligibility verification tools and offer on-site or virtual assistance to help patients navigate the complex Medicaid application and redetermination processes. Trained staff or vendors can guide patients through documentation requirements and ensure timely submissions.

2. Expand Charity Care and Sliding Scale Programs

As more patients lose Medicaid coverage, providers should revisit and expand their charity care policies. Implementing sliding scale payment options based on income can help patients afford care while reducing the likelihood of unpaid bills.

3. Improve Patient Communication

Clear, proactive communication is essential. Providers should use text messages, emails, phone calls, and patient portals to remind individuals about redetermination deadlines, required documents, and available support services. Educational materials should be culturally and linguistically appropriate to the population served.

4. Partner with Community Organizations

Collaboration with local nonprofits, faith-based groups, and advocacy organizations can extend the provider’s reach and impact. These partners can help identify at-risk individuals, provide wraparound services, and advocate for patients navigating the healthcare system. Keep in mind that although the current administration has rolled back or modified various initiatives related to health equity, what will NOT change is that social determinants of health (SDOH) are still significant cost drivers for population health. These will need to be considered in parallel with eligibility and enrollment support strategies.

5. Monitor Policy Changes and Advocate

Providers must stay informed about how their state implements H.R. 1 provisions. Engaging in policy advocacy—either independently or through professional associations—can influence how exemptions, cost-sharing, and redetermination processes are applied at the state level. Also, it is important to keep in mind that many of H.R.1's provisions are effective on different dates, making compliance strategy a challenge.

6. Strengthen Revenue Cycle Management

Billing and administrative teams should be trained on the new Medicaid rules to identify coverage gaps early and intervene before accounts become delinquent. Implementing predictive analytics and early-out collection strategies can also help reduce bad debt and uncompensated care.

Conclusion

H.R. 1 represents a fundamental shift in Medicaid policy that will have far-reaching consequences for patients and providers alike. While the legislation aims to promote personal responsibility and reduce federal spending, it also increases the risk of coverage loss and financial strain on healthcare systems. By taking proactive steps to support patients, streamline operations, and engage with the community, providers can protect their financial health while supporting optimal health outcomes for the population they serve.

Dawn Carter
Sr. Director, Health Policy and Regulatory Affairs
Centauri Health Solutions, Inc.