Objective:

To analyze the potential impact of the 2025 reconciliation law on Medicaid state-directed payments for hospital services across various states.

Approach:

• Analysis Overview: The analysis evaluates federal Medicaid expenditures expected to exceed new federal restrictions on state-directed payments for hospital services.

Key Findings:

• New legislation restricts states to payments aligned with Medicare rates, which are generally lower than commercial rates.

Limitations:

• Annual revenue losses for hospitals are not projected as they depend on various factors.
• The analysis does not account for state-specific reactions to the new limits.