Description:
Implementing per capita caps or other measures would limit federal contributions and shift greater financial responsibility to states, likely resulting in reduced coverage and reimbursement for low-income individuals.

Recent Developments:
House debates $2.3T in Medicaid cuts (including $918B in per capita caps) while the administration pushes spending caps and work requirements. A $340B Senate budget plan may further impact funding.

1m Risk Assessment (scoring guide)
Impact: Critical
Likelihood: Moderate
Imminence: Neutral
Onset: Multi-Year
Permanence: Indefinite
Quantification Method: 14.7% (50% x $220B / $746B) loss of Medicaid revenue. 10 year average annual cuts / 10 year average annual Medicaid spend, discounted by 50%.

Mitigations:

• Identify Dual Eligible Patients: Implement EHR-based screening and on-site counseling to identify and enroll Medicaid patients who qualify for Medicare, VA benefits, or state waiver programs.

• Align High Medicaid Sites with Sustainable Funding: Where appropriate, refocus services at high-Medicaid sites on services with more sustainable reimbursement, such as Medicare-certified rehab (IRF), VA-funded care, SAMHSA-backed behavioral health, and HCBS waiver-eligible long-term care.

• State Medicaid Advocacy Initiatives: Advocate for states to offset federal Medicaid cuts by maintaining provider assessments, securing state-level FMAP supplements, preserving and expanding Medicaid where applicable, and implementing premium assistance programs.

• Negotiate Medicaid Value-Based Payment Carve-Outs: Negotiate with Medicaid MCOs to stabilize funding through a mix of fixed per-member-per-month payments for general care and supplemental value-based carve-outs for high-cost services like maternity care, behavioral health, and chronic disease management.

Description:
Imposing work requirements and other restrictive criteria could create barriers to access, resulting in coverage losses and increased uncompensated care for health systems.

Recent Developments:
Arkansas, Ohio, and South Carolina are pursuing the reinstatement of Medicaid work requirements, aligning with federal proposals to expand restrictions nationwide. These changes may increase administrative burdens and cut coverage for 600K-1.3M.

1m Risk Assessment (scoring guide)
Impact: Moderate
Likelihood: Likely
Imminence: Imminent
Onset: One Year or Less
Permanence: Indefinite
Quantification Method: 1.2% (0.95M / 79.31M) of Medicaid volume shifts to Low-Pay/No-Pay. Expected decline in enrollment / total Medicaid enrollment.

Mitigations:

• Advocate for State Medicaid Coverage Protections: Advocate for state policymakers to minimize coverage losses from work requirements by implementing broad exemptions, automatic hardship waivers, and streamlined reporting processes.

• Establish Medicaid Enrollment & Employment Support Services: Invest in hospital-based Medicaid navigation programs to assist patients with eligibility documentation, job training referrals, and exemption filings.

• Develop Bridge Programs for Patients Losing Coverage: Implement hospital-funded premium assistance, sliding-scale payment models, and short-term coverage options to support patients losing coverage.

• Partner with Employers to Reduce Uninsured Care: Work with employers in high-turnover, low-wage industries to expand affordable healthcare access through preferred network agreements, direct service contracts, or employer-sponsored coverage options.

Description:
Policy changes such as site-neutral reimbursement and uncompensated care funding reductions could shift financial burdens to healthcare providers.

Recent Developments:
House proposes $479B in Medicare cuts, including $146B through site-neutral payment reforms.

1m Risk Assessment (scoring guide)
Impact: Critical
Likelihood: Unlikely
Imminence: Neutral
Onset: Multi-Year
Permanence: Indefinite
Quantification Method: 2.2% (75% x $48B / $1,643B) loss of Medicare revenue, excluding adoption of site-neutrality by commercial payers. 10 year average annual cuts / 10 year average annual Medicare spend, discounted by 25%.

Mitigations:

• Retain High-Reimbursement Procedures in Inpatient Settings: Reevaluate inpatient vs. outpatient classification for complex procedures, ensuring high-reimbursement services remain inpatient when clinically appropriate.

• Convert Eligible HOPDs to ASCs: Transition select hospital outpatient departments to ambulatory surgery centers where appropriate, maintaining procedural volume while aligning with site-neutral payment policies, and securing higher commercial and MA reimbursement.

• Negotiate Commercial Contract Protections: Negotiate commercial contract protections, including site-of-service rate differentiation, payment guarantees, and anti-steerage provisions, to prevent commercial payers from mirroring Medicare site-neutrality.

Description:
Altering Medicare's drug price negotiation policies established under the Inflation Reduction Act could raise pharmaceutical costs for health systems and reduce affordable care options for patients.

Recent Developments:
The president reversed cost caps on select drugs via executive order, signaling a weaker stance on broader Medicare price negotiations ($10B in annual savings). The Federal Trade Commission is investigating pharmacy benefit managers for pricing practices that could affect drug costs and access.

1m Risk Assessment (scoring guide)
Impact: Moderate
Likelihood: Moderate
Imminence: Imminent
Onset: One Year or Less
Permanence: Indefinite
Quantification Method: 0.5% (50% x $9.85B / $1,029.8B) loss of Medicare revenue (downstream effect). Annual savings / annual Medicare spend, discounted by 50%.

Mitigations:

• Negotiate Bulk Drug Purchasing Contracts: Negotiate direct volume-based purchasing agreements with drug manufacturers and wholesalers, securing price protections, bulk discounts, and biosimilar adoption incentives.

• Expand Specialty Pharmacy & Infusion Services: Develop or expand in-house specialty pharmacy and infusion services to retain full reimbursement, reduce reliance on external pharmacies, and improve payer contracting position.

Description:
The diversion of funds from traditional Medicare to Medicare Advantage plans could create disparities in coverage and limit access to care for beneficiaries.

Recent Developments:
Project 2025 and OMB leadership are pushing to make Medicare Advantage the default, diverting funds from traditional Medicare and impacting 30M+ beneficiaries.

1m Risk Assessment (scoring guide)
Impact: Moderate
Likelihood: Moderate
Imminence: Neutral
Onset: Multi-Year
Permanence: Indefinite
Quantification Method: 49% loss of Traditional Medicare volume: 47% shifts to MA and 2% is lost due to reduced access. Expected shift to MA associated with making it the default option. Assumes a portion of volumes are lost due to reduced access.

Mitigations:

• Optimize MA Contracts & Network Access: Strengthen MA position by negotiating higher reimbursement rates, securing value-based payment incentives, reducing prior authorization hurdles, and ensuring inclusion in high-performance networks.

• Develop Direct-to-Senior Enrollment Support: Establish hospital-led Medicare enrollment assistance programs to educate and guide seniors on MA plan selection, ensuring alignment with health system-covered services, and reducing out-of-network leakage.

• Expand Risk-Sharing Agreements with MA Plan: Where favorable, expand risk-based contracts with MA plans, securing capitated payments, bundled care arrangements, and quality-based incentives.

Description:
Alterations to the ACA could reduce Medicaid expansion and weaken the insurance marketplace. Enforcement of delayed Medicaid DSH payment reductions could reduce critical funding.

Recent Developments:
Two Biden-era executive orders, which expanded ACA enrollment periods and increased funding for enrollment assistance, were revoked. Additionally, House Republicans have proposed $151B in cuts that could reduce subsidies and impact coverage for over 20 million enrollees starting in late 2025. Medicaid DSH cuts scheduled for April 2025.

1m Risk Assessment (scoring guide)
Impact: Moderate
Likelihood: Likely
Imminence: Imminent
Onset: One Year or Less
Permanence: Indefinite
Quantification Method: 25.9% (1 - 16.0M / 21.6M) of Exchange volume shifts to Self-Pay. Expected percentage decline in exchange volume. Plus 50% loss of DSH payments.

Mitigations:

• Develop Bridge Programs for Patients Losing Coverage: Implement hospital-funded premium assistance, sliding-scale payment models, and short-term coverage options to support patients losing coverage.

• Expand Low-Cost Primary & Urgent Care Access: Expand lower-cost primary and urgent care services, including hospital-affiliated urgent care centers, telehealth, and community partnerships, to provide affordable alternatives to the ED.

• Partner with Employers to Reduce Uninsured Care: Work with employers in high-turnover, low-wage industries to expand affordable healthcare access through preferred network agreements, direct service contracts, or employer-sponsored coverage options.

Description:
Cuts to public health agency funding could weaken disease prevention and emergency preparedness while also reducing health system grants, research funding, and community program support.

Recent Developments:
The administration has initiated withdrawal from WHO, set for January 2026. The House proposes $1.8B in CDC cuts, and NIH budget reductions may impact disease tracking and research. Federal funding freeze impacts public health programs.

1m Risk Assessment (scoring guide)
Impact: Moderate
Likelihood: Almost Certain
Imminence: Imminent
Onset: Multi-Year
Permanence: Indefinite
Quantification Method: 20% loss of grants, research funding, and community support. Secondary effect: For Pandemic Risk, use 120% of COVID-19 experience and reduce Gov't support by 75%.

Mitigations:

• Pursue Alternative Funding for Public Health Programs: Expand state grants, private-sector funding, and research partnerships to sustain disease prevention, emergency preparedness, and medical research initiatives.

• Strengthen Supply Chain Resilience: Secure diversified medical supply contracts, expand on-site stockpiles, and develop redundant supplier partnerships.

• Partner with Community Clinics to Sustain Preventive Care: Partner with FQHCs, retail clinics, and local pharmacies to maintain access to vaccinations, screenings, and chronic disease prevention programs.

Description:
Changes in immigration policy, including increased ICE enforcement and visa restrictions, could disrupt the healthcare workforce, and deter immigrant patients from seeking care.

Recent Developments:
The administration declared a national emergency at the border, potentially triggering mass deportations, and suspended the CBP One app. These policies may worsen workforce shortages in nursing and long-term care.

1m Risk Assessment (scoring guide)
Impact: Moderate
Likelihood: Almost Certain
Imminence: Imminent
Onset: One Year or Less
Permanence: Multi-Year
Quantification Method: 1.6% (346K undocumented healthcare workers / 22M total healthcare workers) loss of workforce, replacement at 5% higher wages, and 0.5% volume loss due to reduced access for undocumented workers.

Mitigations:

• Implement Immigrant Workforce Stability Program: Streamline visa sponsorship renewals, provide legal assistance for affected employees, and advocate for protections on healthcare worker immigration pathways (H-1B, J-1 waivers, and green card processing).

• Establish Safe Access Policies for Immigrant Patients: Implement safe-zone policies, staff training on immigrant patient rights, and protocols for handling ICE inquiries.

Description:
Restrictive maternal-fetal laws may limit access to comprehensive reproductive care, strain clinician capacity, and increase risks of adverse obstetric outcomes, affecting patient care and organizational performance.

Recent Developments:
The administration signed Executive Order 14182, enforcing the Hyde Amendment, which blocks federal abortion funding. The Project 2025 blueprint promotes fetal personhood laws, increasing provider liability.

1m Risk Assessment (scoring guide)
Impact: Moderate
Likelihood: Likely
Imminence: Imminent
Onset: One Year or Less
Permanence: Multi-Year
Quantification Method: 5% lost OB-GYN volume and 3% excess increase in OB-GYN wages (worsening OB-GYN shortage), and 1 day increase in length of stay (changes to care protocols).

Mitigations:

• Enhance Training on Maternal-Fetal Care Under Restrictive Laws: Implement specialized education and legal training programs for OB-GYNs, emergency physicians, and maternal-fetal specialists to ensure compliance with evolving laws.

• Establish Multi-State Referral Network: Develop formal partnerships with out-of-state providers to ensure patients can access comprehensive maternal-fetal care services.

Description:
Proposed cuts to the AHRQ could limit the creation of new Patient Safety Organizations and reduce federal oversight of patient safety data reporting and healthcare quality research.

Recent Developments:
The House proposed eliminating federal funding for the Agency for Healthcare Research and Quality, potentially ending patient safety research and healthcare quality oversight.

1m Risk Assessment (scoring guide)
Impact: Minor
Likelihood: Moderate
Imminence: Neutral
Onset: Multi-Year
Permanence: Indefinite
Quantification Method: 100% loss of AHRQ grants due to defunding.

Mitigations:

• Establish Patient Safety Collaboration: Partner with other health systems, state agencies, and private organizations to sustain patient safety data sharing, best practice standardization, and quality improvement efforts.

• Secure Alternative Funding for Patient Safety Programs: Offset lost AHRQ funding by pursuing state grants, private-sector partnerships, and internal budget reallocations to sustain patient safety initiatives, research, and data reporting efforts.

Description:
Federal pressure to lower interest rates, combined with tariffs and a heating economy, could reignite inflation, increasing operational costs.

Recent Developments:
The administration called for immediate interest rate cuts. New tariffs adding further price pressures.

1m Risk Assessment (scoring guide)
Impact: Major
Likelihood: Likely
Imminence: Neutral
Onset: One Year or Less
Permanence: One Year or Less
Quantification Method: 2.5% excess increase in operational costs, partially offset by lagged increases in reimbursement tied to CMI-based adjustments.

Mitigations:

• Lock in Long-Term Supply & Service Contracts: Reassess and extend fixed-rate supply, equipment, and service contracts while exploring bulk purchasing, strategic vendor partnerships, and inflation-adjusted pricing models to mitigate ongoing cost pressures.

• Position Financial Assets & Liabilities for Inflationary Pressures: Adjust debt structure and investment strategies to prepare for a heating economy and renewed inflation.

Description:
Removal of the tax exemption on municipal bond interest would increase borrowing costs for health systems.

Recent Developments:
Federal lawmakers consider removing municipal bond tax exemptions, which could increase borrowing costs for hospitals.

1m Risk Assessment (scoring guide)
Impact: Minor
Likelihood: Unlikely
Imminence: Neutral
Onset: Multi-Year
Permanence: Indefinite
Quantification Method: 1.5% (4.5% 10 year UST - 3.0% 10 year MMD) increase in interest rates for new bond financings.

Mitigations:

• Accelerate Tax-Exempt Financings: Lock in tax-exempt financing while available.

• Strengthen Investor Relations in the Taxable Market: Proactively engage taxable bond market participants to expand capital access.

Description:
Potential changes in federal or state tax policies could eliminate the tax-exempt status of non-profit hospitals, increasing financial burdens and reducing resources available for community benefits.

Recent Developments:
Lawmakers review nonprofit hospital tax exemptions, linking them to charity care levels. Some states propose stricter financial reporting rules.

1m Risk Assessment (scoring guide)
Impact: Catastrophic
Likelihood: Remote
Imminence: Neutral
Onset: Multi-Year
Permanence: Indefinite
Quantification Method: 21% federal, ~6.5% state, ~0.25% payroll (FUTA / SUI), ~7% sales, and ~1.75% property (real / business personal) tax payments.

Mitigations:

• Advocate to Protect Non-Profit Hospital Tax-Exempt Status: Engage federal and state policymakers, industry associations, and community stakeholders to highlight the economic and public health impact of non-profit hospitals.