On May 22, the U.S. House of Representatives passed H.R. 1, informally known as the One Big, Beautiful Bill Act (OBBBA). This wide-ranging legislation includes several HHS-related provisions that could significantly impact providers of home medical equipment (HME) and infusion and pharmacy industries.
While the bill aims to control federal Medicaid and Affordable Care Act (ACA) spending and tighten eligibility standards, along with cutting Medicare funding, the downstream effects for providers, particularly those that serve these populations, could be substantial. As policy changes continue to shape the healthcare landscape, it is critical for HME and infusion providers to understand the potential operational and financial impacts.
Key Provisions of the One Big, Beautiful Bill Act
The OBBBA includes the following proposed reforms to programs and coverage:
- Implementation of mandatory work requirements for certain adult Medicaid beneficiaries.
- Required eligibility redeterminations every six months.
- More frequent verification of income and removal of ineligible enrollees (i.e. individuals who are deceased or have moved).
- Imposes mandatory work or school requirements for adult Medicaid enrollees, with states required to verify work or exemption status at both enrollment and redetermination by December 31, 2026.
- Requires Medicaid eligibility redeterminations every six months, with more frequent income verification and removal of ineligible individuals (e.g., deceased or relocated).
- Reduces federal Medicaid funding by over $600 billion over 10 years, shifting greater financial responsibility to states.
- Repeals ACA’s individual and employer mandates, reducing coverage incentives.
- Cuts ACA premium subsidies, decreasing affordability for individual market plans.
- Expands Health Savings Accounts (HSAs), raising contribution limits and expanding uses.
- Repeals ACA-related taxes, including those on medical devices and health insurers.
- Transitions Medicaid funding to a block grant or per-capita cap model, limiting long-term federal contributions.
- Triggers potential Medicare reimbursement cuts (PAYGO) across the healthcare sector starting in CY 2026, unless Congress acts to waive them with a 60-vote Senate threshold.
- Reduces Medicare funding sources by repealing ACA-era taxes, potentially impacting long-term trust fund solvency.
While these measures aim to reduce federal healthcare spending, they also introduce new challenges for providers by increasing coverage instability, tightening reimbursement and creating uncertainty across Medicaid, ACA marketplaces and Medicare.
Implications for Home-Based Care Providers
1. Reduced Coverage and Enrollment
Estimates from the Congressional Budget Office suggest that more than 7.6 million individuals could lose Medicaid coverage under the proposed changes. Additional losses are expected due to cuts to ACA premium subsidies and the repeal of individual coverage mandates. This would reduce the volume of covered patients for HME and infusion providers, particularly in rural and underserved areas, potentially resulting in revenue declines and an increase in uncompensated care.
2. Increased Administrative Burden
The bill’s six-month eligibility redetermination requirement and more rigorous income verification processes are expected to increase the frequency of coverage-related denials and service interruptions. Providers will likely face higher administrative costs as they manage more frequent verification and documentation requests across Medicaid and ACA marketplace plans.
3. Pressure on Reimbursement Rates
With states expected to shoulder a larger share of Medicaid costs, some may respond by lowering reimbursement rates or restricting benefit coverage. Additionally, automatic Medicare reimbursement cuts, triggered under PAYGO rules, could take effect in calendar year 2026 unless Congress acts. These cuts could total up to 4% and would impact a wide range of providers. Together, these changes could affect both the viability of service lines and the availability of certain products, especially those requiring prior authorization or recurring delivery (i.e. infusion pumps, CPAP supplies).
4. Compliance and Billing Complexity
As state Medicaid programs and ACA policies adapt to the bill’s mandates, providers may see frequent changes to billing rules, authorization requirements and documentation standards. Keeping pace with these developments will require continuous monitoring and flexibility.
5. Lack of Reinvestment in Home-Based Care Models
While the bill focuses on cost containment, it does not include offsetting investments in value-based care, care-at-home infrastructure or technology reimbursement. Providers looking to modernize or expand service models may find limited financial support under the current proposal.
Differential Impact: HME vs. Infusion Providers
Both providers will experience more uninsured patients, which could increase the need for indigent care and reduce reimbursement from federal programs.
HME Providers
- May experience broad-based volume declines due to reduced eligibility and limited resupply frequency.
- Could face steeper reimbursement cuts, depending on state-level fee schedules.
- Might be more heavily impacted by authorization backlogs and administrative friction.
Infusion Providers
- Are particularly vulnerable to reimbursement delays and authorization-related care disruptions.
- Serve patients with complex therapies, making them more susceptible to uncompensated care scenarios.
- May struggle to sustain specialized services if reimbursement becomes inconsistent or inadequate.
Strategic Next Steps for Providers
As the OBBBA advances, providers can take action now to mitigate operational risk and prepare for policy-driven disruption:
1. Strengthen Eligibility and Authorization Workflows
Enhancing internal processes to verify Medicaid eligibility more frequently and accurately is critical. Leveraging automated or semi-automated workflows can help reduce delays and denials, especially for high-volume or recurring services. Providers may benefit from external support by outsourcing RCM to navigate payer and prior authorization processing to maintain patient access and cash flow.
2. Prepare for Denials and Appeals
With eligibility tightening, a rise in denials is expected. Now is the time to strengthen appeal workflows and equip staff with the tools and payer-specific guidance needed to respond effectively. Solutions that incorporate denial pattern recognition, predictive analytics and structured appeal support can help reduce revenue leakage and administrative strain.
3. Diversify Payer Mix
Providers should assess their exposure to Medicaid and explore opportunities to broaden their payer base through Medicare Advantage, commercial insurance, B2B, retail or alternative referral sources. Data-driven insights, through software like Prochant Pulse, into financial performance, payer mix and service-line profitability can guide long-term strategy and inform targeted growth efforts.
4. Monitor Policy Developments
Medicaid program changes will likely vary by state, requiring providers to stay informed and agile. Building internal expertise, or tapping into partners with payer-specific knowledge, can help identify policy shifts early and adapt billing workflows quickly to ensure compliance and continuity of reimbursement.
5. Build Operational Resilience
Organizations should plan for fluctuating volumes and reimbursement uncertainty by investing in scalable infrastructure and flexible staffing models. Tech-enabled revenue cycle strategies, including some of Prochant’s Pulse platforms that incorporate workflow automation and real-time performance monitoring can help providers remain efficient and responsive as conditions evolve.
Supporting Providers Through Change
As providers prepare for the potential impacts of OBBBA, including reduced Medicaid enrollment, tighter eligibility standards and increased administrative complexity, having a resilient and responsive revenue cycle operation is more important than ever. Prochant partners with HME and infusion providers nationwide to help them stay ahead of policy-driven disruption with technology-enabled services and expert support.
We understand that reimbursement challenges don’t just impact your revenue, they shape the way you operate. That’s why we offer flexible partnership models, including at-risk or contingency-based engagements where our success is tied directly to yours. We get paid when you get paid. It’s more than a service; it’s shared accountability. We inherit your reimbursement challenges and work alongside your team to solve them.
Here’s how we help:
- Medicaid Eligibility Support: Improve accuracy and frequency of eligibility checks to prevent denials and delays.
- Prior Authorization Management: Streamline workflows for recurring and complex services to ensure uninterrupted care.
- Denial Management & Appeals: Reduce revenue leakage with proactive denial tracking, pattern recognition and structured appeals.
- Scalable RCM Infrastructure: Adapt to fluctuating volumes with tech-enabled workflows and flexible staffing models.
- Real-Time Analytics & Insights: Gain visibility into payer behavior, denial trends, and financial performance with Prochant Pulse.
- Expert-Led Service Delivery: Leverage our specialized teams to reduce administrative burden and keep your revenue cycle moving.
Ready to see how a tech-enabled RCM partnership with our team can strengthen your Medicaid strategy? Reach out for a complimentary impact assessment and next-step roadmap from our revenue-cycle experts.
