Looming Medicaid cuts could devastate DSOs serving Medicaid recipients as economic challenges persist, according to Barry Lyon, DDS.
Dr. Lyon, the dental director for Main Street Children’s Dentistry and Orthodontics and the chief clinical auditor for Dental Care Alliance, recently spoke with Becker’s about how the federal budget could impact DSOs.
Editor’s note: These responses were lightly edited for length and clarity.
Dr. Barry Lyon:
The budget reconciliation bill, HR 1, also known as the “One Big Beautiful Bill Act,” was signed into law July 4. It contains numerous provisions impacting tax policy, healthcare, immigration and environmental regulations. It is also expected to increase the budget deficit by $3.4 trillion by 2034.
One aspect of the bill, to the detriment of Americans and DSOs, are the far-reaching cuts to state’s Medicaid funding. While much of the impact of HR 1 has yet to be felt, states fearing a tariff-induced recession and inflation, have begun cutting Medicaid spending. For example, North Carolina is cutting provider pay by at least 3%, citing funding gaps. Washington is currently cutting hundreds of millions of dollars from its Medicaid funding.
According to an intriguing analysis from Mark Zandi, chief economist at Moody’s Analytics, 22 states are either in a recession or on the verge of one. Should a full-scale recession occur, states will struggle to weather it. As a result, Medicaid programs, which are a significant expenditure for states, will be facing cuts.
DSOs that rely heavily on providing care to Medicaid recipients need to prepare now for the probable reduction in benefits and enrollees.
