The One Big Beautiful Bill Act (OBBBA) enacts the largest cuts to healthcare in history, totaling nearly $1 trillion over the next decade. The Congressional Budget Office projects these reductions will lead to millions of Americans losing coverage, exacerbating uncompensated care and financial pressures on healthcare systems.
The bill is expected to strengthen work requirements for Medicaid recipients and force states to meet new administrative and eligibility tracking requirements without additional federal funding.
This shift increases regulatory risk and operational complexity, putting pressure on governance structures to adapt. Healthcare board administrators must now evaluate how well their enterprise risk management strategy accounts for these changes.
What is the One Big Beautiful Bill Act (OBBBA)?
The One Big Beautiful Bill Act (OBBBA) is a sweeping federal law enacted July 4, 2025, that, among other things, dramatically reduces Medicaid funding and reshapes how healthcare organizations receive and manage public reimbursements. Lawmakers passed OBBBA to cut federal healthcare spending, but the legislation shifts significant financial risk onto hospitals, health systems, and vulnerable patient populations.
Key aspects include:
- OBBBA reduces federal Medicaid spending by $900 billion to $1 trillion over the next decade.
- The law imposes mandatory work requirements, 80 hours per month, for many Medicaid enrollees.
- OBBBA phases out key financial supports like Disproportionate Share Hospital (DSH) payments and rural hospital subsidies, stripping away lifelines for safety-net providers and already-struggling rural facilities.
As Medicaid coverage shrinks and uncompensated patient care rises, healthcare organizations must make difficult decisions about staffing, service lines, and strategic investments. Boards of directors bear responsibility for guiding these responses and updating their strategic risk assessments management and action plans accordingly.
OBBBA Response Strategy for Healthcare Boards
Impact | Response Strategy | Board Role Responsible |
Medicaid cuts (~$930B over 10 years) | Model financial impact by payer mix; revise revenue forecasts; adjust budgets and service plans | Finance and audit committees |
Work requirements (e.g., 80 hours per month) | Predict coverage losses; expand charity/uninsured care planning; track enrollment data | Quality and population health committees |
State-directed payment restrictions | Evaluate risk to DSH/UPL programs; assess funding alternatives | Compliance and regulatory oversight committees |
SNAP and public benefit tightening | Anticipate increased social needs; strengthen community health partnerships | Community benefit and mission committees |
Rural hospital relief fund ($50B) | Evaluate eligibility and submit grants; prioritize capital and infrastructure needs | Strategic planning and capital committees |
Increased regulatory audits and eligibility verifications | Strengthen internal controls and compliance processes | Audit and compliance committees |
Enhance strategic meetings with OnBoard's intuitive board management tools.
OBBBA Response Strategies for Healthcare Boards
In the wake of the One Big Beautiful Bill Act, healthcare boards must act decisively to protect financial sustainability, preserve patient access, and meet new regulatory expectations. The following 5 response strategies can help board administrators, hospital compliance committees, and risk committees navigate the uncertainty ahead while strengthening their enterprise risk certification posture.
1. Model Financial Impact of Medicaid Cuts
Start by running detailed financial models that project how OBBBA’s Medicaid reductions will affect your organization over time. Focus on revenue loss, shifts in payer mix, and rising uncompensated care. Boards should direct CFOs and finance teams to stress-test multiple scenarios and prepare mitigation strategies in advance. These models form the foundation of any enterprise risk certification or strategic planning process and should be reviewed by both the full board and the risk committee.
2. Evaluate Risk to DSH/UPL Programs
Disproportionate Share Hospital (DSH) and Upper Payment Limit (UPL) funds are critical for safety-net providers, but OBBBA puts them in jeopardy. Healthcare boards must assess the short- and long-term risks of these cuts and identify which service lines or facilities will be hardest hit. The hospital compliance committee should ensure documentation and cost reporting processes are airtight, as these are likely to face heightened scrutiny at the state and federal level.
3. Strengthen Community Health Partnerships
As coverage loss accelerates, organizations will see greater demand for charity care and wraparound services. Boards should encourage the development of strong, collaborative partnerships with community health centers, behavioral health providers, and local nonprofits. These partnerships can extend care capacity, reduce emergency department burden, and support long-term population health goals. Assign oversight to the risk committee to ensure these alliances align with enterprise risk priorities.
4. Evaluate RHTP Eligibility Requirements
Although OBBBA introduces the Rural Health Transformation Program (RHTP) as a new source of federal support, access to these funds depends on strict eligibility rules. Boards must instruct leadership teams to conduct a thorough review of RHTP requirements, assess competitive standing, and prepare applications with a clear return-on-investment case. Compliance and grant reporting should fall under the purview of the hospital compliance committee to avoid disqualification.
5. Strengthen Internal Controls and Compliance Processes
OBBBA raises the stakes for regulatory compliance, particularly in areas related to Medicaid billing, eligibility screening, and reporting accuracy. Healthcare boards should direct the hospital compliance committee to review internal controls, audit readiness, and employee training programs. Strengthening governance structures now reduces the risk of penalties later and supports the organization’s ability to maintain enterprise risk management certification in a more complex regulatory environment.
Introducing OnBoard AI
OnBoard AI equips board administrators with powerful tools to streamline board management, enhance collaboration, and deliver measurable results.
With OnBoard AI, boards can:
- Create complete board meeting agendas in seconds using voice prompts or uploaded materials
- Record meetings and receive automatic transcripts with clear, actionable summaries
- Highlight decisions, risks, and governance-related content in real time
- Flag compliance issues or legal concerns instantly for review
- Identify and automate follow-up tasks to strengthen governance
Ultimately, OnBoard’s AI-driven platform offers a secure, efficient way for boards to boost transparency, drive engagement, and monitor performance with confidence.
How OnBoard Supports Healthcare Organizations
The One Big Beautiful Bill Act introduces unprecedented financial and compliance challenges for healthcare providers. With deep Medicaid cuts, shrinking DSH and UPL payments, and increased pressure on rural facilities, healthcare boards must act quickly to safeguard their organizations.
Strategic response includes updating your mission statement to include robust financial modeling, tighter compliance oversight, and stronger partnerships across the care continuum, while maintaining transparency and good governance.
OnBoard’s board management solution for healthcare organizations streamlines operations by helping administrators build agendas aligned with emerging risk and compliance priorities, automatically capture and summarize meetings, flag risk-related and legal language for follow-up, and track governance decisions over time to support enterprise risk certification.
By automating board operations and enhancing insight, OnBoard empowers hospital compliance committees, risk committees, and leadership teams to navigate OBBBA with agility and confidence.
Schedule a free trial to see how OnBoard improves healthcare board management.
The comprehensive blueprint for selecting a results-driven board management vendor.
Ready to upgrade your board’s effectiveness with OnBoard’s board intelligence platform? Schedule a demo or request a free trial.
About The Author
- Kelli Thomas is a customer success manager who joined OnBoard in 2022 and specialized in working with health care boards to meet their ever-changing needs. Her favorite part of the job is building relationships with clients, addressing their needs, and providing solutions. An Indiana University-Purdue University Indianapolis graduate, Kelli lives in Greenwood, Indiana, and enjoys spending time with her husband, son, and dog.
Latest entries
Board Management SoftwareAugust 12, 20255 Steps Hospital Boards Can Take to Improve Audit Readiness
Board Management SoftwareAugust 7, 2025Navigating OBBBA: 5 Response Strategies for Healthcare Boards
Board Management SoftwareAugust 6, 2025Healthcare Risk Management: 5 Ways Boards Can Drive Compliance
Board Management SoftwareAugust 5, 20255 Elements of an Effective Hospital Strategic Plan
