OBBBA: What’s Changing, and What it Means for Providers

October 30, 2025

The One Big Beautiful Bill Act (OBBBA), enacted into law in July 2025, will significantly impact hospital margins by increasing uncompensated care and uninsured patients due to Medicaid spending cuts and administrative restrictions. It will require hospitals to adapt their revenue cycle teams to handle increased complexity in patient eligibility, claims, and reimbursement.

The impact to a hospital’s revenue cycle involves federal healthcare spending cuts, increased patient eligibility hurdles, potential Medicare reimbursement reductions, and the phasing out of certain Medicaid supports, such as Disproportionate Share Hospital payments to help cover care for uninsured patients.¹ These changes will put financial strain particularly on hospitals with high Medicaid volumes. Hospitals face up to $25 billion in annual revenue loss through Medicaid losses stemming from OBBBA, impacting budgets and service delivery across the U.S.²

Key Changes for Health Systems and Patients

Reduced Federal Funding
The OBBBA implements substantial cuts to federal Medicaid spending, partly by eliminating millions from the program and restricting states' ability to fund their programs through taxes on healthcare providers. It includes nearly $1 trillion in cuts to Medicaid over the next 10 years.³

Increased Uninsured Population
The Congressional Budget Office (CBO) projects that 10 million people will become uninsured by 2034 because of the new law.⁴ This number does not include the impact of the law failing to extend the enhanced Marketplace premium tax credits which are scheduled to expire at the end of 2025. Combined with other Marketplace changes already assumed in the CBO baseline, the total increase in the number of uninsured due to the new law is likely to be around 15 million.⁵

New Work Requirements
Adults aged 19-64 in the Medicaid expansion group will face new work and reporting requirements. Although 70% of Adults with Medicaid are purported to be working at least part time, the work requirement provision is estimated to account for $326 billion of the savings expected due to noncompliance with this new rule. An analysis by the Kaiser Family Foundation shows that less than half of older Medicaid adults (age 50-64) would meet the new 80-hour monthly work requirement.⁶

More Frequent Redeterminations
The bill creates new, burdensome administrative hurdles for enrollment and renewal, requiring twice-yearly eligibility redeterminations for Affordable Care Act expansion populations.¹Hospitals and health plans will face the challenge of managing more frequent Medicaid eligibility checks and new verification requirements.

Reduced Retroactive Coverage
The OBBBA reduces the standard retroactive coverage period, which was previously up to 90 days before the application date. For beneficiaries in the Medicaid expansion group, retroactive coverage will be limited to one month before the month of application and for beneficiaries in the traditional Medicaid program, retroactive coverage will be limited to two months before the month of application.¹ These changes will increase the risk of unpaid medical bills for individuals and for providers.

Best Practices to Navigate the Changes

Hospitals will need to develop comprehensive resiliency plans to model potential outcomes and prepare for the operational and financial challenges ahead. Having the right partner to build strong relationships with payers and understand new reimbursement structures is key. The changes will require providers to adapt their revenue cycle processes to handle a larger self-pay population, manage complex enrollment, and navigate reduced payer reimbursements.

Community Outreach and Education
Outreach efforts foster community trust and promote proactive health management, reducing emergency care reliance. By partnering with strategic partners and local organizations, hospitals can improve education on healthcare coverage and preventive care. Health fairs and enrollment events are a great way to connect patients to vital healthcare resources and support systems. Additionally, providing multilingual materials ensures diverse populations receive necessary healthcare information effectively. Driving Medicaid patient engagement to your digital communication platforms (e.g. MyChart enrollment) can also increase options for communication.

Preventive and Primary Care Access
Options such as low-cost or free clinics and telehealth services reduce reliance on emergency departments for non-urgent healthcare needs and promote healthcare access for rural and underserved communities. This enhances convenience and reach for patients and provides them with routine health care such as screening and vaccinations. These preventive care initiatives can improve health outcomes and reduce long-term healthcare costs by minimizing hospital admissions.

Revenue Cycle Optimization
Improving eligibility verification systems reduces billing errors and increases reimbursement accuracy for hospitals. The use of predictive analytics can identify high-risk patients and coverage gaps for targeted financial interventions, and by streamlining claims processing, you can minimize delays and denials, ensuring faster revenue collection. When you outsource nuanced processes to experts, you can help optimize your financial operations and maintain quality care despite insurance challenges.

Policy Advocacy and Flexibility
Providers should monitor legislative updates and engage in public comment periods to influence policy outcomes and prepare accordingly. Collaborating with state Medicaid agencies to explore waivers or alternative funding models can offer temporary solutions for providers. Working with healthcare associations to advocate transitional support programs ensures vulnerable populations' needs are met.

Comprehensive Medical Assistance Screening
Expanding your scope and offerings of the Eligibility and Enrollment program for uninsured and underinsured patients provides additional coverage options for patients. The rise in uninsured patients will increase the need for patient financial counseling and charity care management. Effective screening and assistance programs can reduce patient financial stress and help hospitals maintain cost recovery. With higher complexity, tighter eligibility windows, and more patients falling through the cracks, it’s not enough to have a vendor, you need a partner who can handle regulatory shifts at scale, with the experience, knowledge, and technology to get results.

With implementation deadlines approaching, acting on these strategies is more critical than ever. Simply put: The system is changing, and the stakes are rising. It is time to prepare and act. Hospitals must invest in the partnerships that provide the right revenue cycle technology and improved patient communication to maintain financial solvency and prevent decreased revenue.

About Elevate Patient Financial Solutions^®

A trusted partner for more than 45 years, Elevate Patient Financial Solutions^® delivers market-leading RCM solutions to hospitals and health systems nationwide. To solve the most complex revenue cycle challenges, ElevatePFS^® provides best-in-class services, innovative technology and a customized patient financial journey. Our integrated "Making the Patient Encounter Count" program combines award-winning eligibility and disability services with Marketplace solutions, philanthropic funding, and self-pay advocacy to maximize revenue and patient satisfaction. Our services include Eligibility & Enrollment, Complex Claims, Denials Management, Extended Business Office Engagements, and Self-Pay/Early Out Services. With in-depth, state-specific knowledge and a coast-to-coast presence, ElevatePFS^®delivers exceptional performance and an unmatched client experience.

Resources