How Independent and Smaller Hospitals Can Stay Afloat in the Wake of Transaction Scrutiny and Medicaid Cuts

Lexology September 9, 2025
Hall Render Killian Heath & Lyman PC

On July 4, 2025, President Trump signed into law the “One Big Beautiful Bill Act” (“Reconciliation Package”). The large-scale Medicaid cuts contained in the Reconciliation Package, coupled with recent trends of increased federal and state scrutiny of health care transactions, are expected to result in smaller, independent or rural hospitals looking for non-traditional avenues to keep their doors open. Specifically:

1. The Congressional Budget Office estimates that the Reconciliation Package will result in a $911 billion cut to federal Medicaid spending over the next decade. These cuts come as a result of stringent work requirements for the Affordable Care Act expansion population, limitations on states’ capabilities to collect Medicaid funding through provider taxes, increased barriers to enrolling in and renewing...

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