Providers face hard decisions with Medicaid cuts

• The CEO of New York community health center organization Sun River Health said this is already the most challenging time she's faced in her 48 years with the organization.
• "It's been tougher and more painful in this year so far," Anne Kauffman Nolon told Axios. "It really does threaten the existence of community health centers."

Zoom in: Yakima Valley Farm Workers Clinic in the Pacific northwest expects the new Medicaid work requirements and more frequent eligibility checks to affect 15% to 20% of its patient population — and wipe out 2% to 3% of its revenue, CEO Christy Trotter told Axios.

• The organization had already been preparing for a financial crunch from the end of pandemic-era temporary funding, well before Congress took up the reconciliation package.

Now, administrators are analyzing how to better align non-revenue producing services, like outreach programs and case management, to reach those patients who will benefit most, Trotter said.

• "We're challenging ourselves," she said. "It has to have a return for the patients and for us financially."
• She said the organization may also have to scale back contracts in Washington and Oregon to care for refugees, who will stop being eligible for Medicaid in October 2026.

Finding new ways to pay for health care — like ramping up initiatives to pay providers based on care quality and outcomes, and providing better incentives for primary care — will be crucial for facilities trying to weather the Medicaid changes, Trotter said.

• Providers also want to help minimize disruptions in care for patients who'll face changing eligibility rules.
• City of Hope, a multistate cancer hospital and research center headquartered in California, already has a large patient navigation system to guide people through the steps of getting cancer care that it will leverage to help them meet new insurance requirements, CEO Robert Stone told Axios.
• "We're trying to put in an infrastructure to help patients at a time [when] the state's not ready for the influx that's coming," Stone said.

The big picture: The changes to Medicaid financing and enrollment will largely go into effect in 2027. But some health providers have already started to close clinics and service lines in anticipation of the Medicaid cuts.

• Three health clinics in rural Virginia will be consolidated and patient care will be moved to other facilities in response to the GOP's megabill, Augusta Medical Group announced last week.
• St. Mary's Sacred Heart Hospital in Lavonia, Georgia, is shutting down its labor and delivery unit next month following a review of provider shortages, shifting demographics and the recent cuts to Medicaid, Fox 5 Atlanta reported.
• The cuts may lead to more consolidation in health care as wealthier health systems purchase hospitals that need more capital to survive.

The bottom line: "We're going to do everything we can to make sure [patients] don't fall through the cracks if they do become ineligible," Trotter told Axios.

• "We're going to get creative in trying to make sure that they still get the care they need — in a way that's still financially sustainable for us."