As rural hospital leaders guide their organizations through 2026, they are juggling the financial pressure of federal Medicaid changes while looking to state legislatures for tools to stabilize their organizations.
From Nebraska’s Medicaid work requirements to New Mexico’s updated physician loan forgiveness initiative, the policy landscape is reshaping how rural hospitals recruit, operate and plan for the future.
Becker’s asked six CEOs which healthcare law or legislative change is most top of mind and how their organizations are preparing.
New Mexico
Several New Mexico bills were signed into law March 6; they are focused on reforming hospital funding, medical malpractice rules and patient billing. David Shaw, CEO of Nor-Lea Hospital District in Lovington, expressed appreciation for the initiatives aimed at enhancing physician recruitment and retention.
“Notably, New Mexico’s anticipated participation in the Interstate Medical Licensure Compact and the revision of the state’s loan forgiveness program for physicians, which increases annual awards to $75,000, represent significant progress,” Mr. Shaw said. “These measures demonstrate that New Mexico is committed to welcoming physicians and valuing their contributions to healthcare.”
Once details regarding the updated loan repayment program are finalized, hospital leadership will prioritize understanding the new provisions so it can inform current providers and integrate the information into recruitment materials, he added.
Nebraska
Superior-based Brodstone Healthcare is preparing for the rollout of Rural Health Transformation Program funds and the changes accompanying HR 1, particularly new Medicaid work requirements, CEO Treg Vyzourek said. The organization is taking an active role in educating the Medicaid population in its region as information is released by the state, he said.
“Nebraska is also taking a more aggressive approach by proposing zero-day retroactive eligibility for patients who may qualify for Medicaid,” Mr. Vyzourek said. “We are highly concerned about the financial impacts of the Medicaid cuts and the implementation of work requirements, especially if zero-day retroactive eligibility is approved.”
Operationally, Brodstone Healthcare anticipates increased costs as a result of added administrative burden associated with the rollout of HR 1 and changes to Medicaid, he added.
Medicaid funding changes are also top of mind for Manuela Banner, RN, president and CEO of Memorial Community Hospital and Health System in Blair.
“We are preparing for increased uncompensated care and continued pressure on already thin margins, while doing everything we can to protect access to essential services in our community,” she said. “While the Rural Health Transformation Program grant is helpful, it was never intended to replace Medicaid dollars and will only go so far in offsetting potential cuts, particularly as a significant portion of the funding in our state is directed to entities that are not hospitals.”
Tim Gullingsrud, CEO of Banner Health’s Ogallala Community Hospital, said the state-directed payment model implemented in 2025 has been transformative in helping to improve its financial performance by raising Medicaid reimbursements.
“However, our top concern for this year is the potential decline in these reimbursements and methodology changes that could threaten our financial stability,” Mr. Gullingsrud said. “We’re also actively working on Rural Health Transformation grant applications to ensure sustainable programs within the five-year funding window, while preparing operational strategies to survive on lower reimbursement rates across all payers.”
In addition to managing reimbursement uncertainty, leaders pointed to disciplined operations and workforce support as priorities.
“Our focus right now is on staying disciplined operationally, supporting our workforce and continuing to advocate for sustainable funding solutions that allow rural providers to keep serving their communities,” Ms. Banner said.
North Dakota
Rural Health Transformation Program funding is one of the biggest areas leaders at Linton Regional Medical Center and Wishek-based South Central Health are closely monitoring, CEO Lukas Fischer, BSN, RN, said.
“These changes have the potential to significantly reshape how rural hospitals deliver care by expanding access to telehealth, care coordination and innovative service models,” Mr. Fischer said. “We are actively aligning our operations and partnerships to take advantage of these opportunities while maintaining financial sustainability. The challenge will be balancing innovation with ongoing workforce limitations that continue to impact rural healthcare delivery.”
Arizona
Gary Kartchner, MSN, RN, CEO of TMC Health’s Benson Hospital and Northern Cochise Community Hospital in Willcox, is focused on how policy changes are affecting access to care, such as uncertainty in Medicaid enrollment and declining affordability in the marketplace, which leave patients at risk of becoming uninsured or delaying care.
“At the same time, cuts to SNAP are increasing food insecurity in our communities, which shows up in worse health outcomes when patients do seek care. We are also seeing growing pressure in bad debt, a clear sign that families are struggling to afford care,” Mr. Kartchner said. “Our focus is on strengthening care coordination and working with community partners to intervene earlier, while continuing to elevate these impacts with policymakers.”
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