HCA · 10-Q · 2026Q3 · Full report

Regulatory Risk

HCA Healthcare, Inc. · 2026-10-29 · Importance 79 · Surprise 66 · In source text

The expiration of enhanced premium tax credits (EPTCs) at the end of 2025 and administrative reforms affecting insurance purchased through the Exchanges reduced HCA’s managed-care and insurer revenues in the quarter and nine months ended September 30, 2026. Same-facility uninsured admissions rose 27.4% in the third quarter, and estimated uncompensated-care costs increased to $4.174 billion for the first nine months of 2026 from $3.359 billion a year earlier. The 2025 Federal Budget Act (FBA) requires CMS to limit certain Medicaid state-directed payment (SDP) rates to Medicare rates, with grandfathered arrangements subject to a phase-down beginning with rating periods on or after January 1, 2028. The FBA also restricts Medicaid provider-tax arrangements; CMS issued a final rule in February 2026 and a proposed rule in July 2026, changes that could reduce federal Medicaid funding and negatively affect reimbursement and coverage.

Key facts

• CMS proposed Medicaid managed-care state-directed payment caps tied to Medicare rates rather than average commercial rates; the limits apply to specified services furnished in rating periods beginning on or after July 4, 2025. source
• Some states in which HCA operates obtained approval to increase certain payments up to average commercial rates before the step-down begins in 2028; approvals could generate significant additional revenue, but timing and extent are uncertain. source
• Beginning with rating periods on or after January 1, 2028, grandfathered state-directed payment arrangements will be phased down consistent with FBA payment caps. source
• The FBA restricts provider tax arrangements, and CMS issued a proposed rule in July 2026 and a final rule in February 2026 addressing provider-tax structure, applicability, and safe-harbor limits. source
• HCA warned that final tax-dispute payments exceeding recorded estimates could materially adversely affect results of operations or financial position. source
• The expiration of enhanced premium tax credits at the end of 2025 and administrative reforms affected HCA’s managed-care and insurer revenues and contributed to increased uninsured admissions. source
• At September 30, 2026, the IRS was examining an HCA affiliate’s 2019 income tax return; HCA is also subject to IRS examination for tax years after 2023. source
• Provider-tax changes could reduce federal Medicaid funding and negatively affect reimbursement rates and coverage; HCA cannot predict the ultimate impact on its business and financial results. source

Impact estimates