Nursing Homes Feeling Mixed Effects After “One Big Beautiful Bill” Enacted

PDF

The new “One Big Beautiful Bill Act” was signed into law by President Trump on July 4, 2025.[i] The Big Beautiful Bill held both good and bad news for nursing homes, holding off the onerous and costly Biden-era minimum staffing mandates for 10 years while enacting deep Medicaid cuts and reforms that may reduce nursing home census and reimbursement.

First, the good news.  As we have previously reported, the Biden administration’s final rule related to federally imposed minimum staffing requirements for long term care facilities (“Final Rule”)[ii] was highly unpopular with the nursing home industry.[iii]  The Final Rule sought to mandate minimum levels of nursing staff, require a 24/7 RN on-site requirement, and implement new requirements related to facility staffing assessments, while not providing any related funding to support the new requirements.[iv]  Fortunately, the Big Beautiful Bill now prohibits implementation of the Final Rule until September 30, 2034.[v]

The bad news is related to the Medicaid program.  First, the Congressional Budget Office (“CBO”) estimates that the current number of people without health insurance will increase by 10 million in 2034.[vi]  The CBO attributes the losses of individuals with Medicaid coverage to the new community engagement / work-related activities and citizenship and immigration status requirements, along with other provisions including sections increasing the frequency of verification of eligibility to enroll in Medicaid.[vii]  Medicaid spending is also estimated to be reduced by $911 billion over the next ten years.[viii] 

Next, Medicaid retroactive coverage for non-expansion beneficiaries, which includes nursing home residents, will be reduced from 90 to 60 days effective January 1, 2027.[ix]  This means more risk of unpaid services if applications are not timely submitted by the nursing home or processed in a timely manner by the State. 

The Big Beautiful Bill also requires States to start conducting eligibility redeterminations every six months, instead of every year, effective December 31, 2026.  Luckily, this does not apply to the primary category of Medicaid recipients who receive nursing home care (aged, blind, or disabled).[x] 

Finally, the Big Beautiful Bill bars States from implementing certain new provider taxes or increasing existing provider taxes, which many states use to fund Medicaid programs.[xi]  Again, nursing homes and intermediate care facilities are exempted from these changes, but it will affect other provider types such as hospitals.  KFF reports every state except Alaska finances part of the state share of Medicaid funding through at least one provider tax, with 39 states having three or more provider taxes in place.[xii]  The moratorium is expected to save $191 billion over the next ten years (part of the previously referenced $911 billion of Medicaid spending reductions).[xiii] 

Overall, the Big Beautiful Bill spared nursing homes from the onerous federal staffing mandates for at least 10 years and several other Medicaid funding cuts, but also reduced retroactive coverage time limits in the future.  In addition, the Post-Acute and Long Term Care Medical Association (PALTmed) predicts the Big Beautiful Bill could cause nursing homes to face funding shortfalls and reduced Medicaid reimbursement.[xiv] PALTmed, which represents medical directors, physicians, nurse practitioners, physician associates, and other clinicians in post-acute and long-term care settings, has recognized “Medicaid is the primary source of support for individuals living with serious disabilities.” [xv]    PALTmed urges instead of these types of recent cuts to the Medicaid program, that Congress enact “sustainable, evidence-based reforms that strengthen care for our nation’s most vulnerable.”[xvi]

If you need help navigating nursing home survey, reimbursement, corporate, litigation, employment, or other long-term care or post-acute care issue, please contact Maynard Nexsen. 

_{[i] Yes, “One Big Beautiful Bill Act” is the law’s actual name. Available at https://www.congress.gov/bill/119th-congress/house-bill/1/text}

_{[ii] See 2024 CMS fact-sheet at: https://www.cms.gov/newsroom/fact-sheets/medicare-and-medicaid-programs-minimum-staffing-standards-long-term-care-facilities-and-medicaid-0}

_{[iii] See https://www.maynardnexsen.com/publication-federal-judge-strikes-down-long-term-care-staffing-mandates-nursing-home-industry-cheers-while-also-signaling-a-continuing-need-for-workforce-solutions}

_{[iv] The AHCA’s analysis of the staffing mandate is available at https://www.ahcancal.org/Data-and-Research/Pages/Staffing-Mandate-Analysis.aspx and https://www.ahcancal.org/Workforce-and-Career/Pages/Staffing-Mandate.aspx.}

_{[v] Big Beautiful Bill Section 71111 at https://www.congress.gov/bill/119th-congress/house-bill/1/text}

_{[vi] https://www.aha.org/news/headline/2025-07-21-cbo-projects-obbba-increase-uninsured-10-million-federal-deficit-34-trillion#:~:text=Home-,CBO%20projects%20OBBBA%20to%20increase%20uninsured%20by%2010,federal%20deficit%20by%20$3.4%20trillion&text=The%20Congressional%20Budget%20Office%20today,payments%20($149.4%20billion%20reduction).}

_{[vii] https://www.cbo.gov/system/files/2025-06/Arrington-Guthrie-Letter-Medicaid.pdf}

_{[viii] https://www.kff.org/medicaid/issue-brief/allocating-cbos-estimates-of-federal-medicaid-spending-reductions-across-the-states-enacted-reconciliation-package/#:~:text=On%20July%204%2C%20President%20Trump,in%20and%20renewing%20Medicaid%20coverage.}

_{[ix] Big Beautiful Bill Section 71112 (link in endnote iv).}

_{[x] Id.  Section 71107.}

_{[xi] Id., Section 71115.}

_{[xii][xii] https://www.kff.org/medicaid/issue-brief/5-key-facts-about-medicaid-and-provider-taxes/#:~:text=States%20use%20provider%20tax%20revenues%20to%20fund,helping%20finance%20the%20state%20share%20of%20Medicaid%2C}

_{[xiii] Id.}

_{[xiv] https://paltmed.org/news-media/one-big-beautiful-bill-and-its-impact-medicaid-medicare-and-long-term-care#:~:text=The%20Congressional%20Budget%20Office%20(CBO,use%20to%20fund%20Medicaid%20programs.}

_{[xv] https://paltmed.org/news-media/statement-paltmed-medicaid-vital-vulnerable-seniors-post-acute-and-long-term-care}

_{[xvi] Id.}