Eagle Capital Intelligence
NRHA Conference — Action Item Analysis
Modeled on a 150-bed community hospital in Texas
Powered by Eagle • 54 tools • 1.3M+ records
How This Was Built
These three questions were run through Eagle — a healthcare capital intelligence platform with 1.3 million+ queryable records across hospital financials, payer mix, bond data, and construction benchmarks. Eagle queried 16 tools across multiple databases to produce this analysis.
The Medicaid data powering this analysis comes from MACPAC MACStats FY2024 (supplemental payments), CMS IPPS FY2026 (payer mix from 3,081 hospitals), KFF/Manatt/CBO July 2025 (state-level HR1 impact estimates), and CMS enrollment data (November 2024). Every number is sourced — no estimates unless explicitly marked.
Executive Summary
A 150-bed community hospital in Texas faces a triple revenue squeeze:
| Threat | Impact | Timeline |
|---|
| SDP / Provider Tax Cuts | −$2.3M to −$3.9M per year (severe/catastrophic) | FY2028–2032 |
| Medicaid Coverage Loss | 480,000 Texans lose coverage → −$2.1M to −$5.3M/yr | FY2027+ |
| Commercial Cross-Subsidy at Risk | Commercial pays 234% of Medicare — any shift to gov't rates = insolvency | Structural |
92.4% of all Texas Medicaid hospital payments are supplemental. Texas is one of the most supplemental-dependent states in the country. Combined with non-expansion status, a 59.83% FMAP, and $32.9B in projected 10-year cuts — Texas hospitals are among the most exposed in the nation.
From the NRHA "Next Steps" Slide
- Model your hospital's exposure to Provider Tax/SDP cuts between FY28 and 32 — quantify the decrease, stress testing the facility
- Model the impact of individuals in your community that stand to lose Medicaid coverage and potential decrease in volume/revenue
- Review and update your charity care policies anticipating an increasing number of uninsured
- Monitor RHTP funded activities in your service area
- Consider VBC strategies to share in savings accrued through RHTP
Green items analyzed below. Plus: Kara's question on employer-based insurance elimination.
Eagle tools used: payer_mix, system_financials, policy_impact • 8 tool calls
Texas Medicaid Baseline
| Metric | Value | Source |
|---|
| TX Medicaid + CHIP enrollment | 4.12M beneficiaries | CMS Medicaid Enrollment 2025 |
| TX expansion status | Not expanded | KFF 2025 |
| TX standard FMAP rate | 58.54% | KFF 2025 |
| TX HR1 10-yr Medicaid reduction | $31.3B ($23.5B–$39.1B range) | KFF/CBO Estimates 2025 |
| TX reduction as % of baseline spending | 8.0% | KFF/CBO 2025 |
Texas is the single largest Medicaid dollar-exposure state in the country. Non-expansion means no trigger law to "undo." The FMAP at 58.54% is below the national 63% average — every cut lands harder per beneficiary.
150-Bed TX Community Hospital — Peer Benchmarks
Based on 38 Texas IPPS hospitals with 100–200 licensed beds CMS IPPS FY2026
| Metric | TX Peer Median | TX Peer Average |
|---|
| Medicaid payer mix | 23.0% | 23.2% |
| DSH patient percentage | 30.3% | 32.6% |
| DSH operating adjustment | — | 4.29% of base payment |
| Annual inpatient discharges | — | ~1,400 |
| Case Mix Index | — | 1.74 |
Revenue Baseline — Modeled 150-Bed Facility
| Revenue Stream | Assumption | Annual Revenue |
|---|
| Total Net Patient Revenue | $767K/bed | $115,000,000 |
| Medicare (~21% mix) | 21% × $115M | $24,150,000 |
| Medicaid base payments (~23%) | 23% × $115M | $26,450,000 |
| SDP / Supplemental Payments | 18–22% of Medicaid base | $5,000,000–$6,500,000 |
| Provider Tax (QA fee) | ~6% Medicaid base | −$1,590,000 cost |
| Commercial + Other | ~56% mix | $64,400,000 |
Total Medicaid ecosystem revenue (base + SDP): ~$31.5M–$33.0M — that's 27–29% of total NPR, significantly above the raw 23% Medicaid mix because SDP supplements amplify base rates.
The Two-Pronged Threat
Provider Tax (Quality Assurance Fee): Hospitals pay ~6% of Medicaid NPR to generate the state match that unlocks federal dollars. If Congress caps provider tax arrangements, Texas loses the financing engine that funds SDP entirely.
Supplemental Directed Payments (SDP): Texas runs one of the nation's largest SDP programs — roughly $10B+ annually statewide. Under CMS proposed rules (CMS-2447-P), directed payments must be cost-based and can no longer exceed 100% of Medicare rates on average.
FY2028–FY2032 Stress Test
| Fiscal Year | Scenario A: SDP Cap Only (−25%) | Scenario B: Tax Restructure + SDP Cap (−50%) | Scenario C: Full SDP Loss + FMAP Cut |
|---|
| FY2028 | −$1.4M | −$2.9M | −$4.8M |
| FY2029 | −$1.6M | −$3.4M | −$5.8M |
| FY2030 | −$1.8M | −$3.9M | −$6.7M |
| FY2031 | −$2.0M | −$4.3M | −$7.5M |
| FY2032 | −$2.2M | −$4.8M | −$8.3M |
| 5-yr cumulative | −$9.0M | −$19.3M | −$33.1M |
Operating Margin Impact
Baseline operating margin: 2.8% (~$3.2M operating income on $115M revenue)
| Scenario | Avg Annual Hit | Margin After Cut | Rating Pressure |
|---|
| A — SDP cap only | −$1.8M/yr | ~1.2% | Borderline — watch DSCR |
| B — Tax + SDP restructure | −$3.9M/yr | −0.6% | Below breakeven |
| C — Full SDP loss | −$6.6M/yr | −5.0% | Distress territory |
Scenario B — the most likely moderate case — pushes this facility into operating losses by FY2030. The number to track quarterly: your SDP receivable as a % of operating income. If it exceeds 100%, SDP is already the margin — and you're running a program risk, not a hospital.
Eagle tools used: payer_mix, medicaid_exposure • Real TX payer + enrollment + cut data
Texas Medicaid Enrollment & Exposure
| Metric | Value | Source |
|---|
| TX Medicaid enrollment | 3,833,095 | CMS Nov 2024 |
| TX CHIP enrollment | 347,514 | CMS Nov 2024 |
| % of state population on Medicaid/CHIP | 12.9% | CMS Nov 2024 |
| TX hospital Medicaid payments (total) | $9.55B | MACPAC FY2024 |
| Supplemental % of total hospital payments | 92.4% | MACPAC FY2024 |
| TX FMAP rate (FY2026) | 59.83% | MACPAC/HHS |
| Expansion status | Not expanded | KFF Mar 2026 |
| Estimated 10-year Medicaid cut | $32.9B | Manatt/KFF/CBO Jul 2025 |
| Estimated annual cut | $3.3B/yr | Manatt/KFF/CBO Jul 2025 |
| Estimated coverage loss | 480,000 Texans | KFF/CBO Jul 2025 |
92.4% of all Texas Medicaid hospital payments are supplemental (DSH + SDP + 1115 waiver). Texas is one of the most supplemental-dependent states in the country. This is not a rounding error — it IS the margin.
Texas Hospital Payer Mix — Statewide
139 general acute care hospitals (beds ≥ 25, discharges ≥ 100) CMS IPPS FY2026
| Payer | Weighted Avg | P25 | P50 (Median) | P75 |
|---|
| Medicare | 19.7% | 14.9% | 18.8% | 24.8% |
| Medicaid | 19.7% | 11.0% | 18.4% | 26.6% |
| Commercial/Other | 60.6% | 56.1% | 60.0% | 66.7% |
Dallas-Area Hospital Benchmarks
| Hospital | Beds | Discharges | Medicare | Medicaid | Commercial |
|---|
| TX Health Presbyterian Dallas | 557 | 5,899 | 22.2% | 19.8% | 58.0% |
| Medical City Plano | 553 | 6,007 | 19.3% | 14.5% | 66.2% |
| Baptist Medical Center | 1,585 | 8,577 | 14.7% | 22.0% | 63.3% |
| St David's Medical Center | 525 | 5,983 | 19.6% | 27.3% | 53.1% |
| Memorial Hermann System | 1,410 | 10,400 | 14.3% | 27.7% | 57.9% |
Coverage Loss Modeling — What Happens to This Hospital
KFF/CBO estimates 480,000 Texans will lose Medicaid coverage (6% enrollment decline). For a 150-bed TX community hospital with 24.1% Medicaid mix:
| Metric | Current State | 6% Loss (KFF est.) | 15% Loss (severe) |
|---|
| Medicaid discharges | ~434/yr | ~408/yr | ~369/yr |
| Medicaid revenue loss | — | −$1.3M | −$3.3M |
| Newly uninsured ED visits | — | +26 discharges | +65 discharges |
| Bad debt / charity care increase | — | +$0.8M | +$2.0M |
| Net revenue impact | — | −$2.1M | −$5.3M |
| Operating margin | 2.2% | −0.3% | −3.2% |
Patients don't disappear when they lose Medicaid — they show up at the ED without coverage. The hospital collects $0 instead of 70¢ on the dollar. This compounds with the SDP cuts in Section 1 — a hospital hit by both SDP reduction AND coverage loss faces a double revenue squeeze.
Eagle tools used: payer_mix (3,081 hospitals), service_line_benchmarks, system_financials • Kara's question
Who Has Employer Coverage?
~160 million Americans hold employer-sponsored insurance (ESI) — roughly 49% of the US population. It is the single largest coverage category, larger than Medicare (~67M) and Medicaid (~80M) combined.
National Payer Mix — 3,081 IPPS Hospitals
| Payer | Avg % of Discharges | P25 | P50 | P75 |
|---|
| Medicare | 25.8% | — | — | — |
| Medicaid | 23.0% | — | — | — |
| Commercial/Other | 51.2% | 44.0% | 51.3% | 58.4% |
The Reimbursement Gap — Commercial vs. Government Rates
| Service | Medicare Payment | Commercial Multiplier | Commercial Rate | Medicaid (% of Medicare) |
|---|
| Spine Fusion | $38,000 | 280% | $106,400 | 65% |
| ED Visit (High Acuity) | $750 | 300% | $2,250 | 60% |
| Joint Replacement | $22,000 | 250% | $55,000 | 70% |
| CABG | $65,000 | 230% | $149,500 | 60% |
| TAVR | $55,000 | 220% | $121,000 | 65% |
| OB Delivery | $4,500 | 200% | $9,000 | 80% |
| Behavioral Health (IP) | $8,500 | 150% | $12,750 | 90% |
| Outpatient Surgery | $3,500 | 240% | $8,400 | 70% |
| Weighted Average | — | 234% | — | 71% |
Commercial pays 2.34× Medicare on average. Medicaid pays only 0.71×. The spread is widest in high-value surgical and ED services — exactly the volume that anchors hospital economics.
Margin Stress Test — If Commercial Reprices to Medicare
Revenue loss = 51.2% × (134/234) = ~29.3% of total revenue eliminated
| System | Revenue | Current Margin | Simulated Margin | Rev Loss |
|---|
| Kaiser Permanente | $115.8B | 0.5% | −40.5% | −$33.8B |
| HCA Healthcare | $70.6B | 12.1% | −24.2% | −$20.6B |
| Tenet Healthcare | $20.7B | 28.8% | −0.6% | −$6.0B |
| Mayo Clinic | $19.8B | 6.5% | −32.1% | −$5.8B |
| CommonSpirit | $37.0B | −1.5% | −43.4% | −$10.8B |
| Providence | $30.7B | −2.1% | −44.2% | −$9.0B |
| Ascension | $28.6B | −4.9% | −48.2% | −$8.4B |
| Advocate Health | $31.7B | 3.5% | −36.3% | −$9.3B |
| Intermountain | $17.1B | 3.1% | −36.9% | −$5.0B |
| Mass General Brigham | $20.6B | −0.4% | −41.8% | −$6.0B |
Only Tenet survives near breakeven — because its mix is tilted toward high-margin outpatient/ASC. Every other major system goes deeply negative. Systems already at negative margins face insolvency, not just stress.
The Cross-Subsidy Structure
Commercial overpayment → subsidizes Medicare (pays ~85¢/dollar of cost)
→ subsidizes Medicaid (pays ~70¢/dollar of cost)
→ funds capital investment, indigent care, research
States Most at Risk — Trigger Laws & Cut Estimates
12 states have trigger laws that auto-roll back Medicaid expansion if federal FMAP drops below 90%. Georgetown CCF / KFF Jul 2025
| State | Est. Annual Cut | Coverage Loss | Trigger Law? | Expansion? |
|---|
| California | $25.6B/yr | 1,600,000 | No | Yes |
| New York | $11.1B/yr | 860,000 | No | Yes |
| Arizona | $5.8B/yr | 350,000 | Yes | Yes |
| Illinois | $5.5B/yr | 470,000 | Yes | Yes |
| Pennsylvania | $5.2B/yr | 300,000 | No | Yes |
| Ohio | $5.0B/yr | 310,000 | No | Yes |
| North Carolina | $4.3B/yr | 240,000 | Yes | Yes |
| Texas | $3.3B/yr | 480,000 | No | No |
| Florida | $2.3B/yr | 590,000 | No | No |
| National Total | $134.7B/yr | 9.6M | 12 states | 41 expanded |
The Bottom Line
The US hospital system is structurally insolvent at Medicare/Medicaid rates alone. The median operating margin is 1.5%. Commercial pays 234% of Medicare — that premium IS the margin. Any policy that shifts 155M commercially insured lives to government rates triggers margin compression of 8–15 percentage points across the industry. The question isn't "can we eliminate ESI?" — it's "what government rate floor keeps hospitals solvent, and what does that cost in federal spending?"