Our Advocacy Achievements

Protecting Medicaid

America’s Essential Hospitals has strongly advocated against potential Medicaid cuts proposed during the 2025 budget reconciliation process. These proposed cuts potentially include significant changes to federal medical assistance percentage rates, reductions in various states’ provider taxes, per capita caps, restrictions on state directed payments, and the introduction of federal Medicaid work requirements.

The association has emphasized the devastating impact these measures would have on low-income communities and the essential hospitals that serve them. By engaging directly with lawmakers, issuing public statements, and mobilizing advocacy campaigns, we have worked to protect Medicaid funding and ensure continued access to critical health care services for low-income and underserved populations. We will continue to fight aggressively to protect the program and our members as Congress deliberates the nature and scope of Medicaid cuts.

Protecting the 340B Program

America’s Essential Hospitals has continued to defend the 340B Drug Pricing Program against manufacturer attempts to undermine the program. When pharmaceutical manufacturers proposed illegal and costly rebate models in 2024, America’s Essential Hospitals swiftly urged the Health Resources and Services Administration (HRSA) to act immediately to prohibit their implementation. The association also helped urge nearly 200 lawmakers to sign a letter to HRSA opposing the manufacturer proposal. HRSA followed the association’s advice to use all available tools to enforce the statute, which forced the manufacturers to suspend their unilateral action until the matter is reviewed in federal court. The association has filed briefs in these pending lawsuits, and HRSA has cited the association to support its arguments to stop these illegal rebate models.

In other 340B advocacy, we have continued to vigorously oppose illegal drug company restrictions on 340B drugs dispensed by contract pharmacies. We supported the bipartisan Preserving Rules Ordered for The Entities Covered Through (PROTECT) 340B Act (H.R. 2534), which would protect 340B hospitals from discriminatory practices by insurers and pharmacy benefit managers, and The 340B Pharmaceutical Access To Invest in Essential, Needed Treatments & Support (PATIENTS) Act (H.R. 7635), which would codify 340B providers’ use of contract pharmacies.

Averting Medicaid DSH Cuts

With broad bipartisan support in Congress, America’s Essential Hospitals erased an $8 billion cut to Medicaid disproportionate share hospital (DSH) funding in fiscal year (FY) 2024. Additionally, in March 2025, the association pushed Congress to further delay the cuts until Oct. 1, 2025. These victories are the latest in a decade of wins to eliminate or delay DSH cuts. The association now is working with lawmakers to eliminate the remaining $24 billion in cuts for FYs 2026 through 2028.

Defining Essential Hospitals in Law

More than a decade of association efforts to statutorily define essential hospitals took a major step forward in the last Congress with the introduction of the Reinforcing Essential Health Systems for Communities Act (H.R. 7397), bipartisan legislation that would establish an “essential health system” designation in federal law. The designation bill, which gained cosponsors after its introduction, would give policymakers a powerful tool to target essential hospitals with policy protections, funding, and incentives to support their safety net role. Designation remains a top-tier association advocacy priority.

Stopping Site-Neutral Payment Cuts

America’s Essential Hospitals has made it a priority to stop misguided attempts to put hospital payments for outpatient services on par with those for physician offices. These so-called “site-neutral” policies amount to nothing more than hospital cuts. Despite House passage of the Lower Costs, More Transparency Act, the association helped prevent Senate consideration of the bill that would have expanded site-neutral payments to drug administration services in hospital outpatient departments, jeopardizing access to outpatient cancer treatment and other vital care in disadvantaged communities. We will continue vigorously working to stop these cuts.

Extending Telehealth and Hospital-at-Home Programs

America’s Essential Hospitals played a pivotal role in advocating that Congress extend Medicare telehealth flexibilities. By highlighting the significant benefits of telehealth, especially for underserved communities, we emphasized how these services increase access to care and improve patient outcomes. This advocacy has allowed essential hospitals to leverage technology effectively, provide patient-centered care, and increase capacity through alternative care sites.

We also worked successfully with Congress to extend the Acute Hospital Care at Home waiver, currently employed by more than 380 hospitals across 39 states. This waiver allows hospitals to provide inpatient-level care in patients’ homes, which has improved patient satisfaction and reduced complications like falls and readmissions. Additionally, in March 2025, Congress extended federal funding through Sept. 30, 2025, ensuring stability for these critical programs. We will continue our advocacy to make both telehealth flexibilities and the hospital-at-home programs permanent to enhance access to care and target factors outside hospital walls that influence health.

Protecting State Directed Payments

America’s Essential Hospitals led advocacy to codify an average commercial rate for Medicaid state directed payments (SDPs) to hospitals in the 2024 final Medicaid managed care rule. The association has continued to lead advocacy about the importance of SDPs for essential hospitals, including by publishing an issue brief and creating a new member interest group to empower members to advocate for this important source of funding. The association also is leading the charge to protect SDPs from possible congressional cuts.

Including Essential Hospitals in Rural Health Policy

As policymakers consider changes to support rural health care access, the association is working to make sure that our members are part of the solution. A recent issue brief highlights the ways that essential hospitals support rural communities, including work to expand access to primary and specialty care, leverage telehealth flexibilities, and train health care providers in rural areas. The association also produced a podcast episode on rural health care. In 2024, the association successfully advocated for the inclusion of “high-need urban hospitals” in the Keeping Obstetrics Local Act, which would have increased Medicaid payment rates for obstetrics care, although the legislation ultimately did not pass.

Supporting Member Participation in Value-Based Care

We provide support for our members that enables them to take advantage of emerging value-based care initiatives. We crafted guiding principles to ensure value-based payment models accounted for the unique challenges essential hospitals face. We collaborated with industry leaders to host webinars equipping essential hospitals with critical insights into upcoming value-based care models. We also engaged directly with the administration to elevate our concerns about how hospitals serving a safety net role are defined in policy to ensure that these models accurately reflect the mission and financial realities of our members.

Raising the Visibility of Essential Hospitals

Policymakers and the media turn to America’s Essential Hospitals as the nation’s foremost voice on Medicaid, the 340B program, and other issues important to hospitals that care for underserved communities. Through regular national and trade media coverage, we tell the story of our members and the communities they serve. We also raise our members’ visibility in Washington, D.C., through the Essential Hospitals Political Action Committee, Federal Action Network, Policy Assembly, and Government Relations Academy.