Hospital industry lobbyists are focusing their efforts this month on a handful of financial assistance programs and regulatory flexibilities as Congress works to keep the government open into the next fiscal year.
Twelve appropriation bills or a temporary continuing resolution must be passed before Oct. 1, with some, such as the budget for the Department of Health and Human Services, having direct impacts on healthcare.
Separately, hospital groups wrote in recent letters (PDF) and policy statements that they are hoping other programs with deadlines at the end of the month or the end of the calendar year might be included in any funding packages.
First among these are the Low-volume Adjustment (LVA) and Medicare-dependent Hospital (MDH) programs, which provide additional payments to rural hospitals and others that see fewer patients. Both programs will expire Sept. 30 and have been temporarily extended by Congress numerous times over the years (most recently in March). Similar to prior deadlines, hospitals are asking Congress for either a permanent or multiyear extension to reduce budgeting uncertainty.
Additionally, the Medicaid Disproportionate Share Hospital (DSH) Program is scheduled to implement an $8 billion reduction starting Oct. 1, with an additional $8 billion in cuts set to follow for next two fiscal years. The program provides additional payments to more than 2,500 hospitals to compensate for the deficit between Medicaid payments and care costs for beneficiaries and the uninsured.
Though similarly delayed during previous congressional sessions, the cuts as directed in the Affordable Care Act are inappropriate as expected health coverage expansions have not materialized, the American Hospital Association (AHA) wrote in a July fact sheet (PDF). Several hospital associations and other provider-aligned groups, in a Sept. 5 joint letter (PDF) to Congressional leaders, also contended that the scheduled reductions will only heighten financial challenges to come as the One Big Beautiful Bill Act’s state-directed payment limits and projected rise in uninsurance rates take effect.
“With almost $1 trillion in cuts to the Medicaid program on the horizon, we ask that Congress take bipartisan action to eliminate or further delay the implementation of reductions to the DSH payments set to take effect at the end of the calendar year,” Charlene MacDonald, executive vice president of public affairs for the Federation of American Hospitals (FAH), which represents for-profit systems, wrote this past week in a letter (PDF) to Congressional leaders.
The other end-of-month cutoffs aren’t directly tied to provider payments but to how they are able to deliver care outside of the hospital.
Starting during the pandemic and since extended during funding showdowns, Congress has waived geographic requirements and expanded originating sites for Medicare telehealth services as well as expanded the types of practitioners and entities eligible to furnish those services, among other flexibilities.
Notably, such permissions have allowed health systems to deliver acute-level care to patients in their homes under hospital-at-home models. As of July 2025, 400 hospitals across 142 health systems submitted waivers and were approved to provide hospital-at-home services.
Though statute making these flexibilities permanent would be their preference, hospitals say extensions of the telehealth and hospital-at-home flexibilities ahead of the Sept. 30 expiration will help sustain the reported benefits of these care models.
“A long-term extension of the [hospital-at-home] waiver will not only provide additional time to continue gathering data on quality improvement, cost savings, and patient experience, but will also provide much-needed stability for new programs and may ease state concerns about updating Medicaid policies to cover these services,” the AHA wrote in a July fact sheet.
The programs and flexibilities set to expire this month, though urgent, are historically popular in Congress and routinely make their way into short-term and full-year spending packages.
Expiring enhanced premium tax credits could 'destabilize' care, hospitals warn
The bigger open question for hospitals—and the top-line items of their policy advocacy materials—will be whether lawmakers have the stomach to allow enhanced premium tax credits for health insurance marketplaces to expire with the new year.
The Congressional Budget Office estimated expiration of the credits, established during the COVID-19 pandemic, will result in 4.2 million more people becoming uninsured by 2034. A recent KFF analysis estimates that marketplace premiums will increase a median 18% in 2026 due in large part to the credits’ expiration.
The FAH’s MacDonald, in a letter, warned that projected enrollment declines and market destabilization due to the expiration “have the potential to force some insurers to exit markets entirely, which could lead to the creation of health insurance deserts.” Congress must extend the tax credits “at the next legislative opportunity,” he wrote.
The AHA said the projected coverage reductions, which would be more severe in Medicaid non-expansion states, “would put considerable financial stress on hospitals, health systems and other providers, which will face more uncompensated care and bad debt. This, in turn, would make it difficult for them to maintain services in their communities.”
In a recent op-ed for cross-industry coalition Keep Americans Covered, Mary Haddad, president and CEO of the Catholic Health Care Association of the United States, warned that nonprofit and safety-net hospitals are running on “dangerously thin” operating margins. A spike in uncompensated care due to uninsured patients seeking emergency care would “destabilize an already fragile healthcare system, especially in the current moment of elevated uncertainty.”
“Extending [enhanced premium tax credits] is not just a smart policy—it is a fundamental obligation to ensure that every family can afford the healthcare they need,” Haddad wrote. “Doing so will protect access to care for low- and middle-income families, older adults and rural communities. Congress must act now to extend the [enhanced premium tax credits] and prevent a crisis in coverage.”
As with the summer’s OBBBA, Republicans lawmakers weighing the expiring tax credits face an uncomfortable tension between increasing the federal deficit and doubling down on healthcare funding cuts polls have shown to be deeply unpopular. Some are already throwing their weight behind a short-term fix that would carry the issue safely beyond 2026 midterms.
Thursday, Reps. Jen Kiggans, R-Va., and Tom Suozzi, D-N.Y., introduced bipartisan legislation (PDF) that would delay the premiums’ expiration from January 2026 to January 2027. The bill has the support of at least a dozen Republican representatives, according to a release from Kiggans.
“While the enhanced premium tax credit created during the pandemic was meant to be temporary, we should not let it expire without a plan in place,” she said in a statement. “My legislation will protect hardworking Virginians from facing health insurance bills they can’t afford, thus losing much-needed access to care.”