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Alameda Health System warns HR1 could cut more than $100M a year; urges multi‑year planning
Summary
Alameda Health System officials told the County Health Committee that federal HR1 changes and potential Medi‑Cal disenrollments could reduce revenue by more than $100 million annually, urged multi‑year planning, and outlined operational steps — including EPIC integration at St. Rose — to improve cash flow and limit exposure.
Alameda Health System (AHS) officials told the Alameda County Board of Supervisors Health Committee on Oct. 27 that federal changes commonly referred to as HR1 could sharply reduce hospital revenue over the next several years and urged coordinated, multi‑year planning with the county to manage cash‑flow risks.
‘‘We believe that over the next few years, it can be over a $100,000,000 per year, reduction in the revenue that we'll see as an organization,’’ AHS CEO James Jackson said, citing both enrollment‑shift risks and possible reductions in disproportionate‑share (DSH) payments. CFO Kim Miranda told the committee AHS is projecting to reach the current net negative balance (NNB) ceiling of $95,000,000 by June 30, 2026 and could exceed that limit by roughly $74,000,000 in September 2026 unless interventions occur.
Why it matters: AHS is the county’s public hospital system and plays a central role in care for Medi‑Cal beneficiaries. AHS officials told the committee the Alameda Alliance has projected up to 30,000 people could disenroll from Medi‑Cal under certain federal scenarios, a figure the Alliance estimates was associated with roughly $350,000,000 in care last year; AHS staff said they have not yet mapped all downstream impacts and are coordinating with the Alliance to refine projections.
Operational response: AHS outlined several mitigation steps. The system is implementing multi‑year financial planning software and pursuing better collections and billing processes; it said recent IGT (intergovernmental transfer) funding — roughly $30.3 million — helped St. Rose approach breakeven. AHS also described technology and integration work to bring Saint Rose onto Epic (from Meditech), including core network replacements and lab/results integrations; the system has issued an RFP and estimates a possible Epic go‑live in roughly 18 months.
On St. Rose certification: AHS said the facility’s Medicare/Medicaid (CMS) certification review had been delayed beyond an expected 90–120 day window because of a federal shutdown, and while AHS has engaged elected officials to assist, timing remains uncertain and the hospital cannot yet operate at full capacity because it would not be reimbursed until certification is complete.
Board coordination and next steps: Supervisors emphasized the need for joint planning between the Board of Supervisors, the AHS Board of Trustees and county agencies; AHS asked for clarity on the NNB ceiling and said it will continue contingency planning with labor partners and county leadership. The committee did not take final action on AHS budget items but requested continued joint oversight and reporting.
Ending: AHS will return with more detailed multi‑year plans and impact analyses; the committee scheduled follow‑up coordination and an expected presentation to the joint committees ahead of the trustee budget adoption process.
Sources and attribution: Statements by AHS CFO Kim Miranda and CEO James Jackson, and committee discussion during the Oct. 27 Health Committee meeting.
