Nearly $800 million in funding for Wisconsin hospitals is in question due to potential rule changes under consideration by the Trump administration. (Photo by Thomas Barwick/Getty Images)

Nearly $800 million in funding for Wisconsin hospitals is in question due to potential rule changes under consideration by the Trump administration. 

Wisconsin lawmakers and Gov. Tony Evers rushed to finish the state budget in July, ahead of federal legislation making it to President Donald Trump’s desk, to ensure the state draw down additional federal funds. Whether the state will be able to benefit from that funding is now uncertain. 

The 2025-27 state budget included a provision to increase its Medicaid hospital assessment from 1.8% to 6% as a way to supplement the state’s Medicaid resources with matching contributions from the federal government. The change was meant to increase payments to hospitals and to offset the state’s funding for the Medical Assistance program. It was estimated to result in over $1 billion in additional revenue for Wisconsin hospitals. 

A Legislative Fiscal Bureau analysis this week found that “preliminary federal guidance from the Centers for Medicare and Medicaid Services (CMS) has created some uncertainty about the allowability of changes to Wisconsin’s hospital assessment.”

The analysis said that if the increase is disallowed then it would lead to a general purpose revenue shortfall of $396 million annually — or $792 million in the 2025-27 biennium.

“CMS indicated that this matter will be addressed through formal rule making procedures, and thus will be subject to provisions of notice and public comment. Pending additional information from the federal government, the allowability of the Act 15 changes is not currently known,” the LFB analysis stated. 

A group of eight Democratic state lawmakers, including state Rep. Steve Doyle and Sen. Brad Pfaff, both from Onalaska, sent a letter to U.S. Rep. Derrick Van Orden urging him to take action to help ensure Wisconsin receives the funds. Following the state budget, Van Orden claimed credit for helping secure the extra funds for the state.

“Our hospitals, and especially our rural hospitals were counting on that funding to keep their
doors open… At a time when our medical institutions are facing unprecedented financial challenges, we must do everything we can to ensure their ability to continue to operate. Our state budget was counting on it, and our constituents’ lives literally depend on it. We implore you to do everything in your power to reverse these catastrophic decisions,” the lawmakers wrote.