Why It Matters

Virginia’s hospitals face afinancial crisis. Medicaid state-directed payments—a critical revenue source for safety-net and rural hospitals—face steep cuts in Congress, with some hospitals losing up to 85% of this funding. Meanwhile, 46% of rural hospitals already operate in the red, with 432 identified as vulnerable to closure. The Virginia Hospital & Healthcare Association hired Holland & Knight LLP to navigate this crisis—betting that aggressive federal advocacy can stave off devastating cuts while securing critical funding.

By the Numbers

VHHA is ramping up federal advocacy spending in second quarter of 2025 with a $220,000 engagement with Holland & Knight LLP focused on Medicaid state-directed payment programs.

The organization employs a dual lobbying strategy. Its in-house team has filed 45 disclosures since 2015, spending $1.14 million total. External firms include K&L Gates LLP ($450,000 since 2023) and Forward Global US Inc. ($40,000 in 2025). Over a decade, VHHA has spent $2.04 million across 78 lobbying disclosures.

This represents significant expansion. Adding Holland & Knight—a firm with $100 million-plus in historical lobbying income and deep appropriations expertise—marks VHHA’s most substantial external hire, signaling intensifying pressure on hospital finances.

The Agenda

VHHA is lobbying on Medicaid state-directed payment programs, according to its Q2 2025 disclosure. Historical priorities include Medicare and Medicaid payment policies, rural hospital sustainability, the 340B drug pricing program, hospital workforce issues, and federal healthcare appropriations.

The timing reflects mounting congressional pressure. Lawmakers are actively considering rural hospital sustainability legislation, Medicaid payment rate reforms, and workplace violence protections, while simultaneously weighing significant cuts to Medicaid state-directed payments that fund safety-net providers.

Broader Context

Congress is weighing threats that could devastate hospital finances. The Senate is considering budget reconciliation language slashing Medicaid state-directed payments by $149 billion over ten years, while 182 rural hospitals have closed since 2010.

Additional pressures include:

Between The Lines

Active legislation directly affects VHHA’s advocacy targets. The Save America’s Rural Hospitals Act aims to eliminate Medicare sequestration for rural hospitals. Maternal health bills like the Keeping Obstetrics Local Act propose adequate Medicaid maternity payment rates.

Workforce issues dominate congressional attention. The Save Healthcare Workers Act would penalize hospital employee assaults, while the Nurse Staffing Standards Act would mandate minimum nurse ratios with significant financial consequences.

Recent hearings on post-acute care, healthcare affordability, and Medicare Advantage highlight key policy debates VHHA must navigate.

Competitive Landscape

VHHA operates within an intense advocacy ecosystem. State hospital associations in Pennsylvania, Florida, and North Carolina lobby on identical issues, while major health systems like UPMC invest $250,000 quarterly on similar priorities. This collective advocacy creates powerful coalitions pressing Congress on hospital financial pressures.

The Bottom Line

VHHA’s $220,000 quarterly investment in Holland & Knight reflects escalating hospital industry pressure from multiple policy fronts. With Medicaid payment cuts threatening rural hospital viability and additional workforce mandates creating financial uncertainty, VHHA is positioning itself to compete effectively in a crowded advocacy landscape where major health systems are similarly escalating federal lobbying efforts.

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