Small hospitals facing difficult decisions, painful conversations with Medicaid changes

Aug 14, 2025 | 11:38 am ET

By Darrell Ehrlick

Small hospitals facing difficult decisions, painful conversations with Medicaid changes

Big Horn Hospital in Hardin, Montana (Photo courtesy of Big Horn Hospital).

It’s not a spreadsheet exercise for Kristi Gatrell, the CEO for Big Horn Healthcare in Hardin, to imagine the problems that could be in store after Congress passed sweeping changes to Medicaid in the “big, beautiful bill.”

She knows that more than one third of her reimbursements come from Medicaid. When you add in the Medicare numbers, as many as 70% of the payments come from the federal government. She’s seen a yearly budget that had a bottom line of negative numbers.

Federal fallout: Medicaid and insurance in Montana

The Daily Montanan is launching a series of articles that breaks down some of the biggest changes implemented by Congress and signed into law by President Donald Trump in the so-called “Big, beautiful bill.”

All four members of Montana’s Congressional delegation — Republicans Sens. Steve Daines and Tim Sheehy, along with Reps. Troy Downing and Ryan Zinke — voted for these changes.

Today’s stories are the fourth and final installment:

Community concerned: Throughout rural Montana, healthcare providers are concerned about a repeat of the past: Critical-access hospitals, which dot the Treasure State, will see fewer patients with insurance and have fewer ways to get reimbursed, even though the state has not seen a hospital close in more than a decade. (Story by the Daily Montanan.)

Mental health questions: As funding to Medicaid programs decreases, and as rural hospitals become particularly vulnerable, the gains and progress made at getting mental health services into rural areas could be among the first casualties of the new federal legislation (Story by Stateline)

Our previous stories have included:

Another big change in the Big Sky: Whether you’re one of more than 100,000 people on Medicaid or whether you purchase your health insurance on the marketplace (healthcare.gov), recent federal changes will mean a decrease in people who qualify under expanded Medicaid, as well as hefty health insurance premium hikes from those who purchase a plan. (Story by the Daily Montanan.)

Is $50 billion enough: Congress has allocated $50 billion to be used for rural state hospitals, which had been identified as particularly vulnerable in the “Big, beautiful” bill. Republicans from rural states demanded the money in exchange for the support, but will the fund be enough? And, what happens after it’s depleted? (Story by Stateline)

Navigators no more: In February, Congress also voted to defund most of the health insurance navigators at the state level. In Montana, 90% of the navigators won’t be available after many of these changes become reality, leaving residents to answer questions on their own, or try their luck accessing one of the few left after the cuts. These navigators helped residents find insurance, understand their eligibility and explain policy differences. (Story by the Daily Montanan.)

Less leeway: States like Montana had previously come up with their own work eligibility and verification programs. But with the new Trump rules surrounding Medicaid, that means states have less flexibility and fewer resources to navigate the changes (Story by KFF Health News)

Redetermination redo: New work requirements put in place by the Trump administration and narrowly approved by Congress mean that states will now need more documentation and verification that those receiving Medicaid are eligible because they’re working or meet an exemption. Montana’s history with the “determination” and “redetermination” process means that residents who qualify could be accidentally left without insurance while the state must now be in a state of increased processing and reprocessing. (Story by the Daily Montanan.)

Reality check: About all those people watching TV. For years, many conservatives, including U.S. Sen. Steve Daines, have claimed legions of people were essentially freeloading off the government, collecting health insurance benefits without work. However, PolitiFact digs into that claim and finds the narrative, while politically satisfying, is a fiction. (Story by PolitiFact and KFF Health News)

Determining difficulties: The “big, beautiful bill” will require those who want Medicaid to undergo a process of determination for eligibility. The work requirements are new for many states, and they’ll require verification and documentation, which will substantially increase the workload for states, leading some to say the process could be too much to handle. (Story by Stateline)

The spreadsheets aren’t even the most difficult part. It’s the questions from staff who have read headlines, know the industry, and wonder: “Will I have a job?”

When she ventures into the community nestled in southern Montana near two large American Indian reservations, she is often asked: “Will I have my hospital?”

Yes, she answers to both questions, but that doesn’t help her sleep any better as the leader of a healthcare institution affiliated with one of the larger organizations in the state. She began her medical career in the same facility as the radiology technician and worked to the highest position in Hardin.

“We’re hanging on by the skin of our teeth as it stands, and how much more can we afford for the patients who have no insurance coverage?” Gatrell asked.

Healthcare leaders from institutions of all sizes in Montana are in a frustrating waiting game: They understand the upcoming changes, while patients, staff and community members try to absorb the same information. How those radical changes will affect the state and the industry is, for a moment, a lot of questions with few definitive answers.

JJ Carmody, the director of health policy and government relations for Billings Clinic-Logan Health, said that administrators from all parts of the sprawling Montana operations are focused on the upcoming headwinds.

“Because of their (small) size and their volume of the market, it makes them more vulnerable,” Carmody said.

Gatrell has faced headwinds previous: She was the community face when the Hardin-based center announced it would be shuttering its nursing home.

“That was a big impact, and it was hard to be the face in the community that had to tell grandma that she had to find another place to live,” Gatrell said.

She knew the residents there by name and knew a lot of family members even as the staff attempted to find new placements.

For now, she’s encouraging staff to be proactive. She reminds them the only way to survive is working together. It means doing more with less, Gatrell said. Currently, the organization is looking into ways to cross-train staff.

Now, they’re scrutinizing staff training budgets and even equipment.

“We’re still in a wait-and-see mode,” Gatrell said.

That could be as simple as watching their own doors — seeing what the new changes truly mean.

“One of the ways we’ll be able to tell what it looks like is what comes through the doors of the emergency department,” said Zach Benoit, communications director for the Billings Clinic. “We never know what’s going to come through there.”

That could mean patients who have delayed seeking medical help for fear of bills and waiting until a medical concern becomes an emergency.

“At the end of the day, we’re just trying to take care of people,” Benoit said.