The passage of HR1, often called the "Big Beautiful Bill Act," represents a watershed moment for state health and human services agencies. With $50 billion in rural health funding, stricter SNAP payment error requirements, and expanded Medicaid eligibility mandates, states face both unprecedented opportunity and significant compliance risk.
The stakes are high: miss the mark on SNAP error rates and lose up to 15% of funding for benefit costs. Fail to effectively deploy rural health initiatives, and access to health services in rural areas is at risk. North Highland has helped states transform similar federal mandates into measurable wins. Here's how we're partnering with agencies across three critical HR1 impact areas.
Rural Health: Building Sustainable Infrastructure for the Long Term
The $50 billion in rural health funding distributed through HR1 creates a generational opportunity to strengthen healthcare access in underserved communities. But grants alone don't guarantee impact—states need proven frameworks to translate funding into lasting improvement.
For more than eight years, North Highland partnered with a state health agency to strengthen rural hospitals through the federally funded Medicare Rural Hospital Flexibility (Flex) Program. Our three-phase methodology created sustainable transformation rather than short-term fixes.
Patient Care and Quality: Participating hospitals achieved 80.7% overall ratings compared to 76.0% national benchmarks, with patient satisfaction reaching 79.3% versus 73.8% nationally. Clinical quality showed 100% antibiotic stewardship implementation and a 0.0% healthcare-associated infection rate.
Financial Performance: The program delivered 33.16% growth in three-year operating revenue with margins that secured long-term sustainability.
What differentiated this engagement was continuity and capability-building. Hospitals gained the tools, networks, and capabilities to sustain improvement independently—the true measure of transformation success. HR1's rural health funding requires this same approach: strategic deployment that builds lasting infrastructure, not just distributes dollars.
SNAP: Protecting Federal Funding Through Payment Error Reduction
Beginning in Federal Fiscal Year 2027, the federal share of SNAP administrative costs will drop from 50 percent to 25 percent. HR1 also included payment error rate (PER) requirements with significant financial exposure for states with PERs above 6%. States have a narrow window to act.
Payment errors generally stem from three interconnected drivers requiring targeted solutions:
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Business Process and Policy: We identify error sources at each eligibility process step and implement targeted fixes to eliminate root causes by simplifying processes and policies to achieve consistency and quality with the use of AI to provide real-time guidance and support error prevention. We've helped states align SNAP, Medicaid, and TANF eligibility requirements—improving compliance through streamlined processes.
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Systems and Data: Our advanced AI solutions help identify anomalies and improve system business rules, data quality, and determination accuracy. AI policy-outcome-code reviews conduct root cause analysis, identifying gaps between defined eligibility rules and their system implementation.
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Workforce Solutions: Managed services augment eligibility capacity, reducing backlogs while enabling state staff to focus on complex tasks. North Highland’s Managed Services recently helped a state become one of only 15 states performing above the national average in processing times.
Medicaid Eligibility and Redetermination
HR1 introduces the most sweeping Medicaid changes in a decade, including six-month redeterminations and community engagement (work requirements) for the expansion population, and tighter citizenship and address verification. These changes significantly increase operational pressure and raise the risk of significant financial penalties for inadequate documentation.
North Highland brings integrated policy-to-system alignment, AI-driven eligibility accuracy, and redesigned workflows that reduce errors and strengthen compliance, with automation accelerating rule updates and managed services stabilizing operations during volume spikes ensuring modernization doesn’t compromise citizen experience. These methods have prevented hundreds of defects pre-launch and improved processing times above national averages, positioning states to implement HR1’s Medicaid mandates with confidence and measurable impact.
Turning Complexity into Competitive Advantage
HR1 represents the most significant shift in federal health and human services requirements in years, and the opportunity to make meaningful improvements while complying with new requirements. States that approach these changes reactively will struggle with compliance and miss opportunities. Those that partner strategically will transform federal mandates into measurable improvements in clinical quality, financial sustainability, and citizen service.
North Highland brings proven methodologies, deep subject matter expertise, and a track record of helping states navigate complex federal program requirements. The window to prepare is closing—let's discuss how we can help your state turn HR1's challenges into lasting competitive advantages.
Ready to navigate HR1's requirements with confidence? Contact our Health & Human Services team to discuss your state's specific needs and explore how North Highland can help you achieve compliance while delivering measurable impact.
