Oregon will distribute $37.5 million in state and federal funds to 21 rural hospitals to stabilize maternity services, though leaders warn the one-time investment won’t offset looming Medicaid cuts.
In January, Oregon Gov. Tina Kotek announced a $25 million state investment to help hospitals maintain labor and delivery services. In early May, CMS approved an additional state directed payment, bringing total funding to $37.5 million.
Eligible hospitals — most located more than 50 miles from the next closest birth center — may use the funds to hire and retain maternity care staff, upgrade clinical equipment, expand community outreach and support perinatal services for Oregon Health Plan members.
“CMS’s approval enables us to support rural hospitals at a moment when maternity services are under tremendous pressure,” Oregon Health Authority Director Sejal Hathi, MD, said in a May 28 news release. “OHA worked hard to secure this funding because rural families and communities cannot wait as healthcare costs rise and labor and delivery units close.”
The authority plans to distribute the funds based on each hospital’s total Medicaid patient volume in 2026, with final allocations still being determined, InvestigateWest reported June 17. Officials expect to issue the first payments before year-end.
Some hospital leaders have cautioned the funding will not resolve long-term financial pressures. Dan Grigg, CEO of Wallowa Memorial Hospital in Enterprise, told InvestigateWest that the payment “will help us for now” but does not solve the structural problem.
Roughly half of all births in Oregon are covered by the Oregon Health Plan, and state officials project the Medicaid reductions enacted in H.R. 1 will reduce the program by $11 billion through 2031, according to InvestigateWest.
The 21 hospitals slated to receive funding:
Columbia Memorial Hospital (Astoria)
Blue Mountain Hospital (John Day)
Harney District Hospital (Burns)
Providence Hood River Memorial Hospital
St. Charles Madras
Lake District Hospital (Lakeview)
PeaceHealth Peace Harbor Medical Center (Florence)
Samaritan North Lincoln Hospital (Lincoln City)
Samaritan Pacific Communities Hospital (Newport)
Samaritan Lebanon Community Hospital
Saint Alphonsus Medical Center-Ontario
Legacy Silverton Medical Center (Silverton)
Santiam Hospital & Clinics (Stayton)
Adventist Health Tillamook Medical Center
Good Shepherd Medical Center (Hermiston)
St. Anthony Hospital (Pendleton)
Grande Ronde Hospital (La Grande)
Wallowa Memorial Hospital (Enterprise)
Adventist Health Columbia Gorge Medical Center (The Dalles)
Providence Newberg Medical Center
Willamette Valley Medical Center (McMinnville)
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