As we inch closer to 2027, hospital and health system leaders are gearing up to combat incoming effects of HR 1.
The legislation, which was signed into law July 4, 2025, includes Medicaid work requirements, restrictions on state-directed payments and provider taxes, and more frequent eligibility redeterminations.
It also includes the Rural Health Transformation Program, a $50 billion initiative administered by CMS that will distribute $10 billion annually to all 50 states from 2026 through 2030. However, critics remain skeptical whether funds will reach the intended rural areas the program aims to support.
Becker’s recently connected with four hospital and health system CFOs who flagged similar financial concerns, including Medicaid and ACA-related cuts, as they head into 2027.
Here’s how each is preparing.
Doug Arvin, Vice President of Finance for Essentia Health West (Duluth, Minn.)
For Mr. Arvin, whose role spans five hospitals, 36 clinics and nine urgent care sites across western Minnesota and North Dakota, the law’s rollout carries a rural-specific challenge.
“The reforms being brought on by the One Big Beautiful Bill Act are both challenging and concerning, as well as some potential acknowledgment in rural healthcare of the need for transformation,” he said. “We’re keeping a close eye on what we’re seeing with the first phase of the rollout … and also the Medicaid impacts that’ll occur beginning in 2027.”
Carlos Bohorquez, CFO of UC San Diego Health
“The prospects of cuts for programs that have traditionally supported health systems that have provided care to indigent Medicaid populations — the implementation of HR 1, the anticipated cuts to the 340B program, to [the Disproportionate Share Hospital Program], the potential implementation of site-neutral payments — those are things that could be devastating to organizations like us,” he said.
Mr. Bohorquez said the system’s response is to understand the exact financial impact far beyond the next budget cycle.
“Understanding the exact impact in terms of dollars, in terms of potential margin loss — not only for fiscal year 2028, but for the next five to 10 years, is central to the planning process,” he said. “Then, it’s incorporating those assumptions into our five, seven and 10-year financial capital plan. Understanding the impact … we need to make sure that the limited resources all of us have are deployed to the most meaningful and important initiatives. We’re laser focused on execution.”
Matthew Cox, CFO of Corewell Health (Grand Rapids, Mich.)
“The only thing that’s impacted us so far is less people that have access to Medicaid,” he said. “We’re seeing that translate into our organization as increased charity needs, increased bad debts, more patients that are delaying care because they don’t have the same level of access that they did when they had coverage. The cuts we’re going to see, we’ll start to realize in 2027 and beyond in the state of Michigan.”
Mr. Cox, who also serves as national board chair of the Healthcare Financial Management Association, said Corewell brought in McKinsey & Co. consulting firm to find other ways the system can be efficient ahead of the cuts, funneling those solutions through what Mr. Cox called the system’s “Acceleration Office” — a weekly team performance review.
“We’re taking the time now, while we’re strong, to make sure that we’re being incredibly effective and efficient in everything that we do,” he said.
Steve Filton, CFO of Universal Health Services (King of Prussia, Pa.)
Mr. Filton pointed to diversification as UHS’ strong point against enhanced ACA premium tax credits that lapsed at the end of 2025 and the federal Medicaid work requirements that take effect Jan. 1, 2027.
“From a financial perspective, UHS benefits from having a diversified portfolio across acute care and behavioral health and a broad geographic footprint,” he said. “We routinely factor policy-related uncertainty into our planning, and we remain focused on operational efficiency, disciplined capital allocation and maintaining financial flexibility.”
“As we’ve said publicly, we’re continually evaluating how changes in exchange enrollment and Medicaid coverage could affect utilization patterns, but our primary strategy is to remain focused on delivering care efficiently and growing our market presence where demand remains strong.”
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
