UNIVERSAL HEALTH SERVICES INC

Current report

We are sensitive to reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in certain states.

Current report

As described in Sources of Revenue elsewhere in this Report, we receive revenues from various state and county-based programs, including Medicaid in all the states in which we operate. We receive annual Medicaid revenues of approximately $100 million, or greater, from each of California, Texas, Nevada, Illinois, Pennsylvania, Washington, D.C., Kentucky, Tennessee, Massachusetts, Virginia, Mississippi and Florida. Most of these programs are approved on a year-to-year basis and there is no assurance that these revenues will continue at their current rates or at all. We are therefore particularly sensitive to reductions in Medicaid and other state-based revenue programs as well as regulatory, economic, environmental and competitive changes in those states.

Current report

We are subject to uncertainties regarding recent legislative changes to Medicaid program.

Current report

Legislation adopted on July 4, 2025 (the One Big Beautiful Budget Act), attaches work and community service requirements to eligibility for Medicaid benefits that will have the effect of limiting Medicaid enrollment and expenditure. That legislation also places limits on provider fees used to increase federal Medicaid funding to states. The legislation prohibits states not previously having expanded Medicaid eligibility to 138% of federal poverty level from increasing the rate of current provider fees which fund certain state supplemental payments or increasing the base of the fee to a class or items of services that the fee did not previously cover. That current provider fee threshold will remain at 6%. For states having expanded Medicaid eligibility under the legislation, the provider fee threshold will be reduced by 0.5% annually between federal fiscal years 2028 and 2032 with the resulting threshold ultimately becoming 3.5%. The legislation also eliminates certain insurance exchange premium tax credits beyond 2025 and exchange enrollment is expected to be adversely impacted. All of these factors, which could have a material unfavorable impact on our results of operations, may be expected to reduce our revenue and likely increase the level of uncompensated care provided by our facilities.