More than $200 billion in Medicaid cuts struck from 'Big Beautiful Bill,' but hospital associations still concerned

Key Medicaid cuts will have to be struck from the “One Big Beautiful Bill Act” in the Senate if Republicans want to pass it with a simple majority, but hospital associations are still concerned about what policies will make it into the final bill.

Rural hospitals are especially vulnerable to Medicaid cuts included in the bill, according to the American Hospital Association. A June letter signed by the entire Senate Democratic Caucus names over 300 rural hospitals at risk, including 15 in New Mexico, if substantial cuts are made to Medicaid or Medicare payments.

The nonpartisan Senate Parliamentarian Elizabeth MacDonough ruled Thursday that a collection of policy proposals that would slash Medicaid by an estimated $250 billion cannot be included in the expansive budget bill because they do not follow the Byrd Rule. Senate Republicans are trying to get the bill through with a simple majority vote to avoid any filibusters, but that process means following the Byrd Rule: everything in the bill has to substantively affect spending and not be primarily about advancing policy goals.

“Republicans are going to keep rewriting legislation until they reach their goal of what I would say is hurting hard-working New Mexicans to fund the next Republican tax scam,” said Senate Finance Committee member Ben Ray Luján, D-N.M.

About $750 billion in Medicaid cuts are still included in the bill, Luján said.

Senate Majority Leader John Thune, R-S.D., has repeatedly committed not to overrule the parliamentarian, but some Republicans are upset with the setback.

“The WOKE Senate Parliamentarian, who was appointed by Harry Reid and advised Al Gore, just STRUCK DOWN a provision BANNING illegals from stealing Medicaid from American citizens,” Sen. Tommy Tuberville, R-Ala., said on social media, calling for MacDonough to be fired.

The Senate parliamentarian’s ruling isn’t necessarily good or bad news for New Mexico hospitals, according to New Mexico Hospital Association President Troy Clark.

The provider tax in New Mexico is set at 5.8%. The Senate bill is attempting to lower the provider tax cap to 3.5%, which worries hospital leaders because it would reduce the pool of funding New Mexico uses to draw down federal Medicaid dollars. The Senate parliamentarian ruled the provision on provider taxes did not follow the Byrd Rule, according to a news release from Democrats in the Senate Finance Committee.

But, Republican senators could still revise the provision and try to get it into the bill.

“We anticipate the Senate will draft replacement language to address their concerns with provider taxes, which raises more uncertainty as they near a vote. The hospital provider tax in New Mexico is vital to keeping Medicaid rates at the recently increased levels,” Clark said in a statement.

Other provisions in the bill that have not been struck by the parliamentarian could also threaten New Mexico hospitals’ stability, Clark said.

“Of most immediate concern for hospitals is a cap on the total amount that Medicaid can reimburse hospitals — at no more than what Medicare pays, which is lower than the currently allowable level.”

Some Senate Republicans have floated the idea of a $15 billion rural hospital relief fund, according to reporting from Axios.

“If Senate Republicans don’t want rural hospitals to close, then they shouldn’t cut the Medicaid funding that provides support to so many people that live in rural parts of America, plain and simple, full stop,” Luján said.