Hospital finance teams head into 2027 squeezed from both sides. Medicaid work requirements take effect in most states by Jan. 1, 2027, and the One Big Beautiful Bill Act cuts more than $900 billion in federal Medicaid spending over a decade, adding an estimated 10 million people to the uninsured. At the same time, payers push back harder on medical necessity and audit more of what they have already paid.
Many hospitals answer that pressure with appeals. The spend is often necessary, but it is the latest point at which to fix the problem. By the time a claim is denied, the decision that caused it was made days or weeks earlier, when a physician chose whether to admit the patient and under what bed status.
This report sizes the exposure and shows where margin is won or lost: at the moment of physician decision.
Inside, you will learn:
- What drove the more than $48 billion hospitals lost to final denials and bad debt in 2025, and why clinical denials were a key driver.
- Why the choice between inpatient and observation status, made days or weeks before any appeal, shapes whether a claim gets paid.
- How length of stay and order-level choices move cost per stay
- The questions to bring to your revenue cycle, utilization review and physician leaders