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Officials warn HR 1 will limit state‑directed payments; HCA estimates long‑term hospital impact
Summary
HCA staff told the committee HR 1 restricts states' ability to use state‑directed payments above Medicare levels and that existing arrangements will be reduced over time, an adjustment HCA estimates could affect up to $1.5 billion in hospital reimbursements statewide.
HCA staff told senators HR 1 contains provisions limiting state‑directed payments to providers and that a proposed CMS rule would further constrain how states use such payments. Trinity Wilson said the statute and proposed rule prohibit establishing new state‑directed payments that exceed Medicare payment levels and will require existing payments to be reduced by 10% annually beginning in 2028 until they reach Medicare levels.
Wilson estimated this policy change “could impact up to $1,500,000,000 in hospital reimbursements across the state over time as those existing state directed payments are reduced,” and said the proposed CMS rule also extends caps to some fee‑for‑service payments and limits the use of certain value‑based purchasing models.
Senators and staff discussed the longer‑term budget and access implications for providers; HCA said it is monitoring proposed federal rulemaking and modeling state impacts, but did not provide an exhaustive fiscal plan during the briefing.
Committee members requested more detailed impact estimates and noted potential downstream effects on rural hospitals and maternity units already under strain.
