The 2025 Budget Reconciliation Act (also known as “The One Big Beautiful Bill Act” or OBBBA) has been reshaping healthcare in America since it passed in July 2025. As new funding structures take shape, many healthcare administrators wonder how it would affect hospital operations.
Forward-thinking healthcare leaders are beginning to treat locum tenens staffing as a built-in part of their operational model rather than a temporary measure. Explore the bill’s effects and how locum tenens providers can help facilities prepare for the future.
Understanding the Big Beautiful Bill’s Effects on Medicare and Medicaid
At its core, OBBBA will change the amount of federal funding support for Medicaid. The goal is to reduce federal Medicaid spending by $793 billion over 10 years. These changes collectively represent the most significant overhaul of Medicaid since its inception.
Current Medicare and Medicaid Operations
Currently, care facilities that work with the Centers for Medicare & Medicaid Services (CMS) rely heavily on supplemental payments. For inpatient services, the hospital receives a fixed payment through Medicare. This fixed rate is based on the patient’s diagnosis, regardless of the actual cost of care.
Medicaid is a joint federal-state program, giving states more flexibility in setting payment rates. These base rates often pay less than the cost of care. In 2023, Medicaid Fee-For-Services paid less than 58 cents for every dollar hospitals spent on care, excluding supplemental payments.
To bridge the gap between their low base rates and the actual cost of care, states heavily rely on federally funded supplemental payments.
Key Points of the One Big Beautiful Bill
- Limiting federal assistance to cover the difference between Medicaid coverage and the actual cost of care
- Limiting the state’s ability to use “provider taxes” on healthcare facilities (like hospitals and nursing homes) to fund their portion of Medicaid expenditures
- Requires uniform (non-discriminatory) Medicaid provider taxes across all providers within the taxed class and services
- Expands criteria for some facilities to qualify for rural hospital funding
Impact of the One Big Beautiful Bill on Hospitals and Healthcare Facilities
The Big Beautiful Bill doesn’t cut all federal funding, but either the state or the hospital will need to cover the supplemental payments moving forward.
Facilities that rely on additional federal funding each year will need to revise budgets in 2026. OBBBA calls all hospitals to reduce their federal contributions from 6% down to 3.5%.
Urban and rural healthcare systems alike will experience changes. In a 2025 survey, dozens of healthcare facilities nationwide believe that OBBBA will affect their staffing decisions the most.
However, facilities already experiencing financial strain from fewer patients and higher operational costs are worried about their future in their communities.
The Rural Health Transformation Program Fund
For years, rural healthcare has been in crisis. Many facilities are short-staffed, using old-fashioned equipment, and struggling to find help.
The bill creates a $50 billion rural health fund to be distributed across states over the next five years. This is called the Rural Health Transformation Program (RHTP) Fund. The fund will help mitigate the financial impact of Medicaid funding changes in OBBBA.
States must apply to the CMS before December 31, 2025, to be eligible for funding. All approved states will receive equally distributed payments. These funds can pay for recruiting and retaining quality staff in rural areas.
The definition of “rural health facility” for the program is broad, allowing the following facilities to be eligible:
- Hospitals (located in a rural area, treated as rural, or in a rural census tract of an MSA).
- Critical Access Hospitals (CAHs)
- Sole Community Hospitals
- Federally Qualified Health Centers (FQHCs)
- Rural Health Clinics
- Rural Emergency Hospitals (REHs)
- Community Mental Health Centers
How Hospitals Can Use Locum Tenens to Manage OBBBA Impact
The One Big Beautiful Bill Act calls for a better strategy for staffing and continuity of care. Healthcare facilities that view locum tenens as a financial tool, not just a staffing backup, will be best prepared to sustain revenue, patient access, and provider well-being.
Locum tenens represents a key role in the strategic playbook to navigate the upcoming transitional period for most healthcare facilities.
When Hospitals Should Hire Locums
Don’t wait for burnout or backlogs to force your hand. Establish clear indicators, like occupancy above 90%, ER wait times over four hours, or several postponed elective surgeries. These triggers can signal when it’s time to bring in locum providers and turn staffing gaps into measurable, manageable moments.
If you’re losing patients to outpatient or at-home care services, you may be losing money. Compare the cost of hiring locums with the potential revenue lost when patients leave or services pause. For example, if diverting 10 surgeries costs more than a week of locum coverage, the choice is clear.
Using Locum Tenens for Strategic Staffing
We know that the changes brought by the One Big Beautiful Bill Act can feel overwhelming. But with careful preparation, healthcare facilities can overcome with locum tenens as a strategic long-term staffing plan.
Here’s how to integrate locums into your facility’s staffing rotation long-term:
- Contingency Planning for Specialties: Identify your most critical and vulnerable specialties. By building a relationship with a trusted locum agency now, you’ll have qualified providers ready to step in when needed.
- Credentialing & Onboarding in Advance: Work with your locum partner to verify credentials, malpractice history, and references ahead of time. Streamline bylaws, IT/EHR access, and background checks so that when the moment comes, coverage can start as quickly as possible.
- Hybrid Staffing Model: Consider allocating a portion of your workforce budget to locum coverage on an ongoing basis. You can reduce the stress on your core team, maintain continuity of care, and ensure your facility can flex with seasonal or unexpected surges.
- Long-Term Agency Partnerships: Treat your locum agency as a strategic partner. They understand your facility’s culture, anticipate staffing trends, and help you deploy providers at a competitive advantage.
With strategic preparation, locum providers keep patients cared for and allow your facility to adapt to change without losing momentum.
Find Locum Tenens Providers Today!
The One Big Beautiful Bill Act represents a fundamental shift in American healthcare. Although the landscape will change, the need for quality care never will. Locum tenens provides the flexibility hospitals need to keep care consistent.
At Consilium Staffing, our experts work with thousands of healthcare facilities nationwide. From the Pacific coast to Midwestern fields to the largest cities on the Eastern seaboard, we are your partner in locum tenens. Contact your Consilium consultant today to provide care without disruption.
