H.R. 1 Is Reshaping Medicaid: 4 Steps Hospitals Should Take Now

Today, Medicaid can cover care delivered up to three months before a patient applies. Starting January 1, 2027, that look-back shrinks to two months for most enrollees and just one month for expansion adults. For hospitals, that means less time to identify a patient’s coverage and bill for care already delivered. With January fast approaching, preparation is a now problem, not a 2027 problem.

That change is one of several in H.R. 1, also known as the One Big Beautiful Bill Act, that reshape how Medicaid patients stay covered and how hospitals get paid. Beginning in 2027, expansion adults will face work requirements and eligibility checks every six months, putting coverage in near-constant churn. Meanwhile, new limits on provider taxes will squeeze a funding stream that safety-net hospitals have relied on for years.

The Congressional Budget Office estimates the law will cut gross federal Medicaid and CHIP spending by $990 billion over ten years, the largest Medicaid cut in the program’s history. Combined with the enhanced ACA marketplace subsidies that expired at the end of2025, the changes could leave more than 14 million additional Americans uninsured by 2034. For finance and revenue cycle leaders, that means a shrinking margin for error and little time to build the infrastructure to manage it.

Know Where You Stand: Exposure Isn’t Evenly Distributed

Not every hospital faces the same risk. Exposure comes down to two factors: how much of your volume is Medicaid, and how much financial cushion you have to absorb uncompensated care. Safety-net hospitals face the worst of both. Rural and critical access hospitals face an added problem: seasonal work and informal income don’t map cleanly onto work-requirement documentation, so eligible patients are more likely to lose coverage over paperwork than over actual ineligibility. And large health systems that look well cushioned overall may find the risk concentrated in individual facilities serving high-Medicaid communities. Knowing where each of your facilities falls is the starting point for sizing the problem.

Work Requirements Are Already Costing Patients Coverage

‍While most hospitals are still planning around the January 2027 deadline, work requirements are already reshaping who stays enrolled. Expansion adults ages 19 to 64 will need to attest to 80 hours a month of work, community service, or schooling, with carve-outs for groups like pregnant patients, people who are medically frail, and others facing hardship. Those exceptions are already hard to track state by state, and patients who can’t verify compliance get just 30 days’ notice before losing coverage. Early data from Nebraska, the first state to enforce the rule, a meaningful share of applicants and renewing enrollees have already lost coverage for falling short, a sign of what's coming nationwide next year.

The ACA marketplace is seeing a quieter version of the same problem. Since enhanced premium subsidies expired, marketplace enrollment has been shrinking, and enrollees who fall behind on premium payments enter a grace period where eligibility checks still show them as covered, until unpaid claims are clawed back and the balance becomes self-pay, often after the retroactive Medicaid window has closed. Both trends share the same root cause: patients losing coverage over paperwork and timing, not eligibility, with hospitals left absorbing the gap as uncompensated care.

Meet Patient Volume without Scaling Staff

The instinct in the face of rising complexity is often to hire. But the core problem is patient awareness and navigation at scale, not staffing capacity.  Coverage losses tend to come from paperwork, not ineligibility: during the post-pandemic Medicaid unwinding, nearly 70% of people who lost coverage were cut for procedural reasons, such as unreturned forms. Work requirements and six-month renewals will add more deadlines for patients to miss, and no realistic staffing increase can walk thousands of patients through each one.

The more sustainable path is AI and human advocates working in parallel: AI-powered screening and outreach across SMS, email, and voice identify at-risk patients and surface coverage options they'd otherwise miss. Trained advocates handle the cases that need human judgment and trust: appeals, complex eligibility questions, and one-on-one navigation. That combination keeps costs manageable while reaching far more patients than a traditional staffing model can.

For a deeper look at what H.R. 1 changes and how to prepare, download our white paper, H.R. 1 and Medicaid: What Providers Need to Know →

Where to Begin: Four Steps to Take Now

1.     Quantify your exposure. Model Medicaid disenrollment risk, estimate the uncompensated care impact, and calculate how much revenue the shorter retroactive window puts at risk based on your payer mix and A/R performance. Do it facility by facility. That number turns an abstract policy risk into a prioritization tool and a roadmap for the next six months.

2.     Educate patients before deadlines. Many patients won’t know what’s changing until a notice arrives, and some won’t understand it when it does. Start by identifying Medicaid and marketplace patients approaching renewal or coverage termination, including those at risk of losing ACA coverage over unpaid premiums. Then reach them through SMS, email, and AI-powered voice outreach, pointing them to plain-language, state-specific guidance on what’s changed, what’s required, and how to act. With a shorter retroactive window, reaching patients before coverage lapses is the difference between recovered and lost revenue.

3.     Gather work-requirement documentation early. Work requirements add a documentation burden many patients don’t know is coming. Rather than waiting for the state to ask, trained advocates can help patients record qualifying work, school, or community engagement now, confirm whether they qualify for an exemption, and submit applications and documentation to the state on their behalf. For patients who no longer qualify for Medicaid, advocates can connect them with financial assistance, disability programs, or other coverage options.

4.     Keep patients covered between renewals. Enrollment isn’t the finish line. With renewals every six months and work requirements to verify at each one, keep patients engaged with reminders about upcoming deadlines and changes to requirements. That prevents the costly cycle of losing coverage and re-enrolling, and the uncompensated care that falls in between.

Act Now:  Keep Patients Covered and Revenue Protected‍

January 1, 2027, is a deadline, not a starting line. The ACA losses and the first wave of work-requirement disenrollments are already here, and full Medicaid enforcement follows close behind.  Every month hospitals wait to build the infrastructure to identify and reach at-risk patients, more revenue shifts from delayed to unrecoverable, and more patients lose coverage they could have kept. Hospitals that start now will be ready before renewal and work-requirement volume ramps up in 2027, with early performance data on what works for their patient population. The payoff is protected revenue and more patients who stay covered and connected to care.

Not sure where your exposure stands? Firstsource can help you assess your Medicaid risk and build a plan to close coverage gaps. Talk to our team →