As part of President Donald Trump’s One Big Beautiful Bill Act, healthcare subsidies that were initiated by former President Barack Obama’s Affordable Care Act are no longer. The changes in how Medicare and related insurance plans reimburse hospitals for swing bed services are putting new financial pressure on Marion General, but the hospital’s leadership says MGH remains in good financial standing to overcome the adjustments.
While more than 50% of rural hospitals throughout the state are at risk for closing, according to the Center for Healthcare Quality and Payment Reform, Marion General is not one of them. Many of the hospitals were already experiencing financial hardship prior to the removal of the subsidies, primarily because of the state’s refusal to accept federal funding for Medicaid expansion.
However, Marion General will not be immune to the cut of subsidies as one of its top revenue generators faces new obstacles.
Swing beds, hospital beds that can be used for either acute care or skilled nursing care, are one of the largest revenue sources for rural hospitals. But Marion General Hospital Administrator Tomaz McCarty said reimbursement gaps tied to Medicare Advantage and other payer changes are shrinking both revenue and the number of patients the hospital can keep locally.
“The biggest payer for rural hospitals is swing bed service,” McCarty said. “And with the payer changes as far as Medicare, Medicaid and Medicare Advantage patients, patients are more so switching to that because it’s cheaper. And in that program, they don’t cover swing bed services the same. They don’t reimburse the same.”
As more patients enroll in Medicare Advantage plans, which often reimburse at lower rates than traditional Medicare, Marion General has seen fewer swing bed patients and less revenue tied to longer inpatient stays. McCarty said that this directly affects the hospital’s ability to invest in services.
“With that population shrinking, it basically shrinks our patients that we’re able to keep in the hospital, which reduces our revenue,” he said.
The reimbursement changes have forced hospital leadership to rethink financial planning, prioritizing only services that show a clear return on investment and meet direct patient needs in Marion County.
“All of our financial planning has to have a big ROI,” McCarty said. “Nothing cosmetic or anything that’s not necessarily for patient satisfaction or patient enhancement as far as services.”
Instead, the hospital is focusing on services deemed essential to the community, such as mammography, while avoiding offerings that are unlikely to be reimbursed.
“Anything like cosmetic surgeries, that’s not a necessity and there’s not a reimbursement for it,” McCarty said.
McCarty said swing bed access is already restricted by payer rules. Marion General currently only accepts swing bed patients covered by 100% traditional Medicare, limiting options for patients insured through Medicare Advantage or other plans.
Emergency care, however, remains open to all patients regardless of insurance status. Federal law requires hospitals to treat anyone who presents to the emergency room, even though emergency departments are among the most expensive services to operate.
“The ER is a loser for everybody,” McCarty said. “It’s the biggest money loser because you don’t know what’s walking in the door, and you still have to treat those patients.”
McCarty stressed that emergency rooms are not meant to manage chronic conditions, encouraging residents to use primary care providers and urgent care when appropriate.
Transfers also add to costs. When patients require services not offered locally, the hospital must arrange ambulance transport to larger facilities, such as Forrest General.
Patricia Watson, team lead for patient financial services at Marion General Hospital, said the hospital serves a population heavily dependent on government insurance programs such as Medicare and Medicaid.
Rep. Ken Morgan, R-Morgantown underscored the reliance on federal programs for rural hospitals.
“If it wasn’t for Medicare, Marion General Hospital would already be closed today,” Morgan said. “That’s what your satellite hospitals are operating off of.”
Watson said she has not yet seen direct cases of patients losing care due to specific Medicaid changes but acknowledged that the hospital is already feeling broader financial pressure tied to payer mix.
It’s not just Marion General that needs to be aware of what is and is not covered by insurance. McCarty said insurance costs and fear of ambulance bills sometimes influence patient decisions, with some residents declining transfers and leaving against medical advice (AMA) to seek care elsewhere.
As financial pressures mount, McCarty said questions about the hospital’s future are becoming more common in Marion County but that those concerns are unfounded and overblown.
“The No. 1 question I get is, ‘Is our hospital closing?’” McCarty said.
McCarty said Marion General’s affiliation with Forrest Health provides stability that independent rural hospitals lack.
“We are in a unique position that we’re not an independent hospital,” McCarty said. “We fall under an umbrella within a system, and that keeps us afloat and keeps us operational.”
Mississippi is set to receive more than $200 million in 2026 through federal rural health transformation funding that is designed to advance rural healthcare with the subsidies no longer in place. McCarty said the funding will not replace lost revenue but instead will support innovation, such as telemedicine and expanded outpatient services.
“That money is not a way to recoup our losses,” McCarty said. “It’s to transform care, telemedicine, more outpatient services — innovation of care.”
Marion General already offers telemedicine for stroke and mental health patients and utilized it throughout the pandemic, but McCarty said the hospital is exploring further ways to expand services beyond hospital walls.
McCarty said it is difficult to project long-term financial outcomes as application processes for new funding programs continue. Still, he said, Marion General and Forrest Health remain stable and focused on innovation rather than cuts.
“We’re looking to not cut our way out of it,” he said, “but innovate and enhance services our way into the future.”
Editor’s Note: This coverage is supported by a grant from Press Forward Mississippi, part of a nationwide philanthropic effort to strengthen local news so communities stay informed, connected and engaged.
