Recent federal funding cuts to several programs could slash the budget for Dallas’ safety net hospital system in half next year, according to its CEO.
During Tuesday’s Dallas County Commissioner Court meeting, Parkland Health CEO Fred Cerise said the proposed budget for fiscal year 2025 is estimated at $123 million, a stark decrease from last year’s $245 million.
Most of the cuts come from reductions in Medicaid Disproportionate Share Hospital payments, which in the past gave money to qualifying hospitals serving large numbers of Medicaid and uninsured individuals.
Cerise said Congress delayed reducing those funds for years but finally made the cut in the "One Big Beautiful Bill Act" that passed this year. Now, roughly $130 million each year will be lost between 2026 and 2028 in Medicaid alone.
“That’s a significant budget item for us,” Cerise said. “And so that's probably the most significant variable that we are planning for a reduction this year."
Cerise added that while Medicare is not directly impacted by recent funding cuts, there's an indirect impact coming from other states hit with funding cuts that have more uninsured individuals as a result. Medicare collects that data to determine how to distribute funds — so, the Dallas share of funding would be diluted due to rising costs in other states.
Recent tariffs have also increased supply costs by 6%, according to Cerise.
The proposed budget plan, so far, did not provide new funding solutions, something commissioner Theresa Daniel raised concerns over.
“Is it worth some kind of conversation to see if there are any other resources available nationwide or to supplement, recognizing that in particular some of those hardest hit and most vulnerable populations are going to lose out in this?” Daniel asked Cerise.
“We’re continuing our conversations with the state on this to see where other sources of supplemental funding could supplant some of the things that are being lost,” Cerise responded.
With so many of Parkland's patients uninsured, Cerise said the hospital is looking into moving some patients onto an Affordable Care Act plan, but is still uncertain about how those plans may also be impacted by funding cuts.
A final presentation on the proposed budget is expected to be presented to the commissioner’s court Sept. 2.
Penelope Rivera is KERA’s breaking news reporter. Got a tip? Email Penelope Rivera at privera@kera.org.
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