Medicaid cuts put 10 Virginia hospitals at risk, report says

A March report by Public Citizen, a Washington, D.C.-based nonprofit consumer advocacy organization, identifies 10 hospitals in Virginia at heightened risk of closing or reducing services due to H.R. 1, the budget reconciliation package that President Donald Trump signed into law July 4, 2025.

Sometimes referred to as the “One Big Beautiful Act,” the package is projected to cut federal Medicaid spending by $911 billion over a decade.

Accounting for 12.8% of hospitals in Virginia, the facilities deemed high risk are:

• Bon Secours Southern Virginia Regional Medical Center in Emporia
• Buchanan General Hospital in Grundy
• Carilion Tazewell Community Hospital in Tazewell
• Dickenson Community Hospital in Clintwood
• Sentara Halifax Regional Hospital in South Boston
• Sentara Northern Virginia Medical Center in Woodbridge
• Centra Southside Community Hospital in Farmville
• Twin County Regional Healthcare in Galax
• VCU Health Community Memorial Hospital in South Hill
• VCU Health Tappahannock Hospital in Tappahannock

U.S. Sens. Mark Warner and Tim Kaine, both Democrats, highlighted the report in a Friday news release.

“From Southwest to Northern Virginia, hospitals across the commonwealth are now at risk of closure because of Republicans’ tax giveaway bill for the ultrawealthy,” the senators said in a statement. “While the rich got trillions in tax breaks, hardworking Virginians are left paying the price. This latest report shows just how cruel and reckless this law is. Virginians, and Americans across the country, deserve reliable access to affordable, quality care.”

Among the many significant changes in H.R. 1, the law restricts the ability of states to finance the state portion of Medicaid. It gradually reduces provider taxes, a tax states can impose on health care providers, from 6% to 3.5%, starting in October 2027. It also places caps on state-directed payments, sometimes called a Medicaid Directed Payment Program, or DPP, which are payments made to providers by Medicaid managed care plans.

In Virginia, state-directed payments currently account for 16% of net revenue for hospitals generally and up to 33% for institutions with higher Medicaid caseloads.

Virginia has used a provider tax to pay the state’s share of Medicaid expansion since 2018. The tax, which is not to exceed 6% of net patient revenue, is carried by 63 acute care hospitals in the commonwealth.

These hospitals paid $650 million to Virginia in fiscal 2024, according to the Glen Allen-based Virginia Hospital & Healthcare Association, or VHHA, which represents 27 health systems and hospitals.

“When you look at those two policy changes, that’s going to cause hospitals in Virginia in excess of $2 billion a year in lost funding,” said Julian Walker, VHHA’s vice president of communications.

However, Walker also stressed that hospitals are incredibly resilient. He pointed to the concern during the pandemic that hospitals would be forced to shutter en masse due to the expense of caring for a surge in patients and the lost income stemming from having to postpone elective procedures.

“They showed great resilience during COVID,” he said.

Even so, many hospitals have been working for years to restore finances following the pandemic.

“Now they have to, while still dealing with those recovery plans, … begin to plan and project a model for the impacts of this new shift in federal policy,” Walker said. “So these are obviously challenging conditions. I can’t say it’s going to lead to closures. I can’t say it’s going to lead to [a] reduction in force or jobs.”

If the changes take effect, hospitals will likely have to do some belt tightening, Walker allowed.

“They’re going to have to make plans to adapt and to adjust,” he said.

Health systems respond

Mike Kafka, a spokesperson for Hampton Roads-based health system Sentara Health, disagreed with the report’s statement that two Sentara facilities are at risk. “There are no plans to close Sentara Halifax Regional Hospital or Sentara Northern Virginia Medical Center,” he said in a written statement Friday.

Kafka pointed out that in January, Sentara held a topping off ceremony for Sentara Halifax Regional’s new $107 million hospital, which is set to open mid-2027.

“Ensuring access to quality care for the communities we serve remains our highest priority,” Kafka said. “We will continue to serve the communities who rely on us, advocate for those without a voice and work alongside state and federal leaders, nonprofit partners and fellow health systems to navigate the road ahead.”

In the report, Public Citizen wrote, “Obstetric care, care focused on pregnancy, childbirth, and postpartum care — already severely under strain — has taken significant hits in recent months.” It provides Lynchburg-based Centra Health, a health system that serves more than 500,000 people in Central and Southern Virginia, as an example, because Centra discontinued obstetrician and gynecologist services at Centra Southside Community Hospital in Farmville and at Centra Medical Group’s Southside Women’s Center in late 2025.

A December announcement about the change by the health system said that Centra, “like other rural health care providers, must adapt to significant financial and operational challenges, including recently enacted reductions in federal health care funding.”

On Friday, a Centra spokesperson said that the health system has no plans to close Southside Community Hospital and pointed out that on Nov. 3, 2025, the Farmville hospital broke ground on a $5 million renovation and expansion of its emergency department

“Southside Community Hospital is a vital resource for the community,” Centra said in a statement.

Centra also said it is “navigating an increasingly complex environment.”

“Recent federal policy changes, including H.R. 1, introduce significant shifts in Medicaid funding, eligibility and enrollment that could impact provider sustainability and patient access to care if fully implemented,” Centra said in the statement. “Hospitals play a critical role in both community health and economic stability and changes of this magnitude will require thoughtful adjustments over time.”

Danielle Pierce, a spokesperson for VCU Health, said that in response to H.R. 1, the health system plans to  “closely monitor federal changes, identify emerging challenges and stay in active communication with government stakeholders.”

Roanoke-based Carilion Clinic said in a statement that the health system continues “to closely monitor H.R. 1 and are unable to speak to potential impacts as we await final details.”

“Like all nonprofit hospitals, we are accustomed to tight operating margins in caring for patients in our communities,” the health system said. “We’re careful stewards of our resources, and we’ll continue to work hard to be efficient and thoughtful about carrying out our mission to invest in the community’s long-term health.”

Dickenson Community Hospital is operated by Tennessee-based Ballad Health, which serves Tennessee, North Carolina and Kentucky as well as Virginia. A spokesperson for the health system noted that Dickenson Community Hospital is a critical access hospital, a designation the federal government gives to eligible rural hospitals. These facilities receive certain benefits designed to reduce their financial vulnerability.

“It is because of this classification that Dickenson County Hospital and others can maintain stable operations,” Ballad Health said in the statement. “We are continuing to assess the potential impact of H.R. 1 to ensure our facilities can adapt to the new funding environment.”

Other at-risk hospitals

In June 2025, four Democratic U.S. senators warned in a letter to the president and Republican congressional leaders that 338 rural hospitals, including six in Virginia, could be at risk of closing if what was then the One Big Beautiful Bill passed, citing research from the University of North Carolina’s Cecil G. Sheps Center for Health Services Research.

The six named Virginia facilities included some not on the Public Citizen list: Bon Secours Southampton Medical Center in Franklin; Bon Secours Rappahannock General Hospital in Kilmarnock; and Lee County Community Hospital in Pennington Gap. Three made both lists: Bon Secours Southern Virginia Regional Medical Center; VCU Health Community Memorial Hospital and Carilion Tazewell Community Hospital.