News

Dear Community Members,

As part of our commitment to transparency and keeping you informed, I want to share an update on recent passage of the federal legislation known as the “Big Beautiful Bill.” This bill will impact the Medicaid program and its funding. While many of its details and specific impacts to Cass Regional are still unknown, the key elements of the bill include:

• Establishes a Rural Transformation Fund: Beginning in FY2026, $50 billion will be distributed over five years to support rural hospitals. To whom and under what pretense this funding will be allocated is still to be finalized.
• Implements Medicaid Work Requirements: For able-bodied working age adults to be eligible and remain a Medicaid recipient, verification requirements tied to employment and/or seeking employment twice a year will be added.
• Reduce State-Directed Payments: Starting in FY2028, State-directed payments under the Medicaid program to hospitals and nursing homes will be reduced by 10% annually until aligned with current Medicare rates. This is estimated to a $1B reduction in Medicaid payments to providers annually.
• Reduces the level of Provider Taxes used to fund the Medicaid program: State provider taxes will be reduced by 0.5% annually until they reach 3.5%. Missouri's current provider tax rate is 5% resulting, when fully in pace, a $1.2B reduction in federal funds to operate the Medicaid program annually.

Overall, these elements are estimated to reduce funds under the Medicaid program in the State of Missouri by some $2 billion annually, and they will require expenditures currently not in place today to develop the infrastructure necessary to ensure the work requirements for participation under the program are being met.

Globally, these changes could impact the number of residents in the state qualifying for Medicaid that could lose coverage-currently estimated to be 130,000 residents. As a result, the number of individuals seeking care who are uninsured could increase as could those not seeking or delaying care, not managing chronic conditions, etc. Downstream impacts could result in an increase in the number of people seeking care in the emergency department and more people needing higher levels of care as the deferments cause their conditions to worsen. In addition, these changes could result in fewer providers who are willing to participant and see Medicaid recipients. The benefit structure provided under Medicare may also be affected. In the end, the reductions in reimbursement to providers could push some healthcare facilities and system beyond their operational and financial breaking points.

At Cass Regional, we are working to model various scenarios to better understand the likely impacts of this bill on the overall financial health of the organization. While the outlook raises concern, Cass Regional Medical Center is in a strong financial position with significant days of cash on hand (i.e. financial reserves) that far exceed the national averages for hospitals and compare favorably to many of the rural facilities in and around the region. This stability gives us the flexibility to respond strategically to future reimbursement challenges and continue to provide high-quality, patient focused care.

As always, we remain committed to the mission of Cass Regional Medical Center in advancing care to the communities we serve.

Thank you for your continued trust and support.

Sincerely,

Christopher Lang, MHA, FACHE
CEO, Cass Regional Medical Center