Key OBBBA Provisions Affecting Governmental and Not-for-Profit Hospitals: A Practitioner’s Lens

ABSTRACT

This paper examines key provisions of the One Big Beautiful Bill Act (OBBBA) with significant implications for governmental and not-for-profit hospitals. We focus on five Medicaid provisions aimed at reducing fraud, abuse, and waste: (1) cross-state duplicate enrollment detection, (2) expanded Death Master File screening for beneficiaries and providers, (3) more frequent eligibility redeterminations, (4) shorter retroactive coverage periods, and (5) limitations on good-faith waivers for erroneous payments. For each provision, we explain the statutory change and discuss practical implications for hospital operations, including eligibility management, revenue cycle processes, and uncompensated care risk. We then consider implications for external auditors, particularly with respect to revenue recognition, receivables, and compliance risk assessment. Finally, we discuss the Rural Health Transformation Program as a financial and compliance counterbalancing component of OBBBA, highlighting how targeted funding for rural hospitals coexists with, and may partially offset, broader Medicaid cost-containment measures.

Data Availability: This article does not use or generate data.

JEL Classifications: H51; I18; M41.