‘Deep Concerns’ about Hospital Stability, Tort Reform Highlight Budget Hearing

March 05, 2026

For the second consecutive week, the state’s Human Services secretary warned lawmakers about how Medicaid cuts and other health policy changes put Pennsylvania hospitals at risk.

On Wednesday, Val Arkoosh, Human Services secretary, told the House Appropriations Committee about the challenges on the horizon, particularly for rural providers.

Payment cuts from H.R.1, the loss of enhanced premium tax credits, and additional administrative requirements for Medicaid will lead to more uncompensated care.

“It is going to be tough going these next few years,” she said.

Here are some key takeaways from this week’s hearing:

• Deep Medicaid concerns:  Arkoosh cited a HAP-commissioned report warning of dire financial challenges Pennsylvania’s hospitals face. She urged action to protect access to care. Investments that keep people healthy and insured are first steps, she said.
  • “Frustratingly, the lion share of those cuts are going to fall on our hospitals, particularly our rural hospitals, because they benefit the most from some of these assessments and state-directed payments,” she said of H.R.1.
  • With significant changes on the way, the department is updating its Medicaid management system to improve prior authorization, automate some administrative tasks, and clarify timelines for providers, she noted.
• Maternal health:  Doulas are now eligible to provide care to Medicaid patients following the passage of a 2024 state law.
  • There are 299 certified doulas in the state, and 155 are serving Medicaid beneficiaries at 240 service locations, Arkoosh said.
• GLP-1s and Medicaid:  Covering GLP-1 drugs for weight loss dramatically increases costs. Pennsylvania stopped covering these drugs for this reason this year, which will result in hundreds of millions in savings annually.
• Tort reform:  The return of venue shopping in medical liability cases puts pressure on obstetrics and other specialty care, as more cases move to high-cost areas, noted Representative Eric Nelson.
• What’s next for rural health transformation:  The first round of the Rural Health Transformation Program will fund initiatives across eight collaborative regions. Each rural region will have one state staffer taking feedback and that process will be underway soon.

Watch the morning and afternoon sessions online.