North Dakota Providers Face Phased Medicaid Cuts

Healthcare operators relying on Medicaid expansion payments should plan revenue around a 2028 reduction schedule.

Updated on Nov. 3, 2026 in Healthcare

Wide photograph of a plain brick rural healthcare building alone on flat North Dakota prairie under a big cold sky, with a gravel road leading toward it. — Senator Kevin Cramer asked federal health officials to phase in Medicaid reimbursement changes that begin reducing payments to North Dakota providers in January 2028. AI Illustration. Upload story photo >

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Senator Kevin Cramer asked federal health officials to take a phased approach to Medicaid reimbursement changes affecting North Dakota providers. The request, sent to Health and Human Services Secretary Robert Kennedy Jr. and CMS Administrator Dr. Mehmet Oz, also asks for a partnership on the Rural Health Transformation Program, which affects rural healthcare operators statewide.

Why it matters

The federal law creating a tiered pathway to reduce certain Medicaid expansion state directed payments begins phasing in January 1, 2028, and Cramer argues abrupt changes could leave providers facing a fiscal cliff. North Dakota's large rural population and long travel distances make the revenue timing particularly consequential for healthcare businesses that depend on these payments.

The Rural Health Transformation Program is a $50 billion federal investment program created through the Working Families Tax Cut Act. Reductions to certain Medicaid expansion state directed payments begin January 1, 2028, phasing down annually until a target is reached, and the letter does not state that target.

The players

Kevin Cramer

Republican U.S. Senator from North Dakota who sent the letter requesting the phased approach.

Robert Kennedy Jr.

Secretary of the U.S. Department of Health and Human Services, which oversees federal health programs and Medicaid policy.

Dr. Mehmet Oz

Administrator of the Centers for Medicare & Medicaid Services, the federal agency that administers Medicaid and sets its payment rules for states and providers.

The details

The letter asks federal agencies to work with North Dakota on a phased approach so that changes to existing Medicaid payment arrangements do not arrive all at once. Cramer also asks that the state be able to draw on the Rural Health Transformation Program to reshape how rural care is delivered. Without a phased approach, Cramer warns, providers could face sudden revenue losses that disrupt care for patients and communities.

January 1, 2028: Tiered reduction of certain Medicaid expansion state directed payments begins.

Market Landscape

The Working Families Tax Cut Act sets a federal schedule for reducing certain Medicaid expansion state directed payments, starting in 2028. North Dakota's request asks federal officials to stretch that schedule so rural providers can adjust while using the Rural Health Transformation Program's $50 billion to reshape care delivery.

Healthcare providers that rely on Medicaid expansion payments in North Dakota should model revenue under a phased reduction schedule beginning in 2028. Finance and operations teams should track whether federal agencies accept the phased approach, since that decision determines how quickly any revenue gap opens.

The takeaway

Providers should map the share of revenue tied to Medicaid expansion state directed payments against the January 1, 2028 start date now. Consult qualified healthcare finance counsel or an accountant before making contract or staffing commitments that depend on those payments.