Amid the Federal Shutdown: Steep Cuts to Medicaid

As we conclude National Case Management Week 2025 with the theme of “Guiding Journeys,” we are making a point of celebrating case management professionals who lead with heart, expertise, and purpose!

During this week’s festivities, Mary Beth Pace will share how the work of the professional case manager is getting harder, as the patients and families we journey beside are dealing with an ever-more costly, complex, and fragmented healthcare system.

Patients as consumers are struggling to juggle household discretionary spending. The latest data we have is from August, due to the federal government shutdown. It shows that healthcare expenditures account nationally for 8.3 percent of the monthly consumer price index, or CPI.

In the last 12 months, the overall CPI increased 2.9 percent. However, the healthcare services portion increased 4.2 percent, the largest percentage increase relative to housing, food, and energy costs. Individuals are truly feeling this, as average wage growth is only between 1 and 1.2) percent. This is critical information to digest as we prepare for the potential loss of marketplace subsidies and escalating insurance premiums that can only mean households will be spending more for healthcare.

As you may be aware, on July 4, the President signed into law a budget reconciliation bill, the One Big Beautiful Bill Act (OBBBA). The bill included significant policy changes to Medicaid and the Health Insurance Marketplaces. The Congressional Budget Office (CBO) score indicated that the OBBBA will lead to nearly $1 trillion in Medicaid cuts, and could result in roughly 12 million people losing Medicaid and health insurance coverage. The CBO also stated that changes to state-directed payments (SDPs) and providers’ taxes is expected to save the government $340 billion, leading to drastic payment cuts to hospitals. According to one analyst, employer health plan enrollment could rise by 3.2 million if Congress lets federal subsidies for individual coverage expire. In addition, unless extended, the Patient Protection and Affordable Care Act (PPACA) subsidies expiration will cause, on average, a 114-percent increase in premiums for 2026.

Multiple projections have the number of uninsured people nationwide rising to 28 million, a 21-percent increase.

This bill, absent any updates on expiring programs, including Disproportionate Share Hospital (DSH) cuts, telehealth and Hospital at Home will significantly impact hospitals and physicians in Medicaid expansion and non-expansion states.

We are already seeing substantial impact with the shutdown, as Congress and the President struggle to find a compromise that extends federal program legislation. In the meantime, states will soon be dipping into contingency funds to keep basic programs like Women, Infants, and Children (WIC) flowing to those who depend on them. As for telehealth and Hospital at Home, popular programs included in the current continuing resolution, we are in a holding pattern, with the Medicare Administrative Contractors (MACs) directed on Oct. 1 to place a 10-day hold on telehealth payments to avoid reprocessing, in case Congress restores the pre-pandemic flexibilities that expired Sept. 30.

Add on to this the deep cuts to research funding, and directional changes at the U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS), healthcare systems are making daily decisions about funding existing programs and future growth strategies. All of this creates uncertainty for providers, employers, and individual consumers. It is in this current climate that case management teams, who are already dealing with increasingly difficult families and decreasing local resources, will see exponentially more challenges in developing safe and effective discharge plans.

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Patricia Velky, MS, MBA, ACM-RN, CMAC, CPHQ, FABC

Ms. Velky is a registered nurse with over 45 years of healthcare experience in a variety of settings. She began her career with an ADN as a bedside nurse in the Ohio community hospital setting working in women’s services, medical surgical and ICU. After relocating to Texas she worked as a clinic nurse and educator for a large cardiology practice in the Texas Medical Center. In the mid eighties she transitioned to the managed care environment where she progressively assumed leadership roles in Utilization and Quality Management. Her range of experience in managed care includes large for profit and start up plans, as well as non-profit, IPA and TPA work. Additionally she has worked in managed care programs in several states in the northeast and Texas. She has a proven track record of program development, implementation and leadership. Her Case Management career began with a return to the hospital environment in 2002 as the Director at Memorial Hermann Southeast. She transitioned to a Corporate Care Management role in 2008. She left Care Management briefly to develop a clinical compliance program as part of Memorial Hermann’s Corporate Compliance team. She returned to Care Management operations in 2019 and is part of a team who provides programmatic support to Memorial Hermann Health System and the campus CM teams. During her long career Ms. Velky continued her education completing a Bachelors in Nursing, Masters of Science in Case Management and MBA. She is a Fellow of the Advisory Board, Certified in HealthCare Quality, has her Accredited Case Management certification and her CMAC as a certified CM administrator. She has 2 adult children and her 7 year old granddaughter is the apple of her eye. Ms. Velky joined ACMA in 2008 serving several terms in various Board positions for the Greater Houston Chapter. She also has had the privilege of serving on committees at the National level and has served as a Member at Large and now President of the ACMA National Board of Directors. She counts membership in ACMA and the lifelong learning and friendships it has provided among her greatest gifts. She resides near Friendswood, but is traveling to hike and camp wherever and whenever possible.

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