By Jonathan Weil
Shares of Universal Health Services and other large U.S. hospital chains fell sharply Monday. The moves appeared to be in response to a directive Friday by President Trump telling the government to scrutinize Medicaid payments more closely.
UHS shares fell as much as 10% before paring some losses. Tenet and HCA also declined.
Trump in his memo told the Department of Health and Human Services to "take appropriate action to eliminate waste, fraud, and abuse in Medicaid, including by ensuring Medicaid payments rates are not higher than Medicare, to the extent permitted by applicable law."
It remains to be seen whether Trump's directive has any practical impact. That is because U.S. lawmakers are still working on legislation that could help define what rates are permitted.
Trump's memo came weeks after Republican budget hawks in the House gave hospital operators a reprieve of sorts in their campaign to curtail Medicaid spending. For example, House Republicans had considered limiting state-directed Medicaid payment rates so they don't exceed Medicare rates. Instead, they called for new regulations to do that prospectively, and included a provision that indicated payment programs already approved by federal regulators could stay at the higher rates.
The language in the tax-and-spending bill could change because the Senate is working on its own version. Whatever the final version ends up saying, the Friday memo signals that the Trump administration may keep looking for ways to trim Medicaid spending through regulatory action. Trump in his memo also criticized Medicaid programs commonly known as state-directed payments and provider taxes, which have provided lucrative cash streams for UHS and other hospital operators, but didn't include any specific steps to address these.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
June 09, 2025 14:07 ET (18:07 GMT)
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