NATIONAL HARBOR, Md. — Hospital finance leaders rolled out the red carpet for the Trump administration’s new health care affordability czar at an industry conference on Monday. He promptly took the main stage to champion Medicaid cuts that threaten their bottom lines.
Casey Mulligan, appointed by Robert F. Kennedy Jr. as the Department of Health and Human Services’ chief economist and chief regulatory officer in April, spent most of his speech at the Healthcare Financial Management Association’s conference praising the One Big Beautiful Bill Act’s cuts to state-directed payments, which the government projects could save $510 billion over 10 years.
State-directed payments work by first taxing Medicaid providers like hospitals and nursing homes, using that money to obtain federal Medicaid match dollars, and then redistributing the money to providers, often giving them more than they paid in taxes. Since 2024, some providers have gotten reimbursed at much higher commercial rates. The One Big Beautiful Bill Act will gradually trim those payments beginning in 2028 until they’re close to or on par with Medicare rates.
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