Rural hospital asks North Carolina lawmakers for help over federal Medicaid cuts

Executives from FirstHealth told a state legislative committee that federal Medicaid cuts in the law known as HR1 are expected to reduce revenue and could force reductions in local services and staffing, while state officials noted North Carolina received federal Rural Health Transformation funds and is expanding nursing programs.

State lawmakers heard from health leaders about strains on rural hospitals during a legislative committee meeting. Executives from FirstHealth of the Carolinas said federal Medicaid cuts in the law known as HR1 will lower revenue and could force reductions in services and make staffing harder to sustain. Lawmakers also discussed workforce efforts and federal Rural Health Transformation funds sent to North Carolina. Key points: - FirstHealth said Medicare and Medicaid account for nearly 70% of its patients' hospital bills and projected declining operating income, with a potential operating loss by 2032. - A policy group reported about 700 rural hospitals nationwide are at risk, and identified nine of 56 rural hospitals in North Carolina at risk of closure, six of them at immediate risk. - Legislative proposals under discussion include reducing nonprofit hospitals' property tax exemption and changes to the state's certificate of need rules. - North Carolina received about $213 million from the Rural Health Transformation Program, and the UNC system is using $40 million in federal COVID rescue funds to expand nursing programs, with an expected net increase in nursing graduates. Summary: Officials told lawmakers that federal Medicaid reductions are likely to strain rural hospital finances and could lead to reduced local services. Legislators are reviewing proposals related to hospital tax exemptions and certificate of need rules while state agencies highlighted new federal funds and a nursing expansion; the next legislative actions are under committee review and undetermined at this time.