By Modoc Medical Center
Modoc Medical Center has had concerned community members ask about the financial impact of the H.R.1 “One Big Beautiful Bill (OBBB)” that was signed into law by President Trump on July 4th. Some of these concerns stem from a letter by several U.S. Senators addressed President Trump and key Congressional leaders prior to the vote on the OBBB. The letter expressed concerns about rural facilities remaining financially viable with the proposed health care cuts included in the bill and cited a University of North Carolina report that analyzed the financial health of rural hospitals nationwide using public data. This report listed all rural hospitals in the top tenth percentile of facilities based on the volume of Medi-Cal (Medicaid) patients they serve.
Since Modoc Medical Center (MMC) provides services to a large number of Medi-Cal patients, the letter identified MMC as one of the “at-risk” rural hospitals in California. It is important to note that MMC was not listed as a result of any financial indicator that the organization is in any current financial distress.
Nationally, the OBBB will reduce Medicaid spending by $1 trillion over the next decade. Provisions of the OBBB will be implemented over the course of the next several years, with changes of varying impact taking effect over multiple fiscal years. These changes are expected to have a substantial impact on MMC, where more than 50% of the organization’s net patient revenue comes from the Medi-Cal program. The enactment of the OBBB represents the largest Medicaid cut in U.S. history through sweeping structural changes to eligibility, enrollment, and financing. Given the scale of these cuts and the timing of implementation over the next few years, MMC leadership is diligently assessing the impacts of OBBB provisions on an individual basis as federal and state guidance becomes available. “We are committed to understanding this bill in its entirety to better project the
short and long-term financial ramifications on MMC,” said MMC CEO Kevin Kramer. “While the financial impact of the federal budget cuts is significant, I am confident that we will be able to find a way to continue to provide high quality health care services in our community for many more years to come.”
Over the past decade, Modoc Medical Center has been fortunate to maintain a positive operating margin. Unlike many rural hospitals, MMC benefits from stable and reliable revenue sources, including a locally collected district tax. While the federal budget cuts represent a significant challenge to all healthcare providers, MMC leadership remains hopeful that the cuts can be navigated in a way that will allow the organization to remain financially viable and continue to grow.
