Memorial Health System, the Marietta-based health system serving Washington County and the surrounding Mid-Ohio Valley, is waiting on roughly $80 million in Medicaid supplemental payments that are pending before the federal Centers for Medicare & Medicaid Services, CEO Scott Cantley told Becker’s Hospital Review.
About $60 million of the total is tied to the Ohio Rural Tax Pilot Program, a state-directed payment program — the first in Ohio created for rural hospitals — that has awaited CMS approval for 15 months, according to Becker’s. The remaining roughly $20 million comes from Ohio’s 2026 Hospital Additional Payments Program, which Cantley told Becker’s has gone unpaid for the first time in his 32 years working in Ohio hospitals.
The two pots of money are different, and both are stuck. The roughly $60 million pilot-program share is a new, rural-specific program Ohio created and the state submitted for federal approval — it has now been waiting on CMS for 15 months, according to Becker’s. The roughly $20 million from the 2026 Hospital Additional Payments Program is an existing channel that, in Cantley’s three decades in Ohio hospitals, had never gone unpaid before, he told Becker’s.
The delay is not an accounting footnote for Memorial. It has stalled financing for the system’s Women and Children’s Hospital in Belpre, a project that broke ground in October 2024 and is a partnership between Memorial and Akron Children’s Hospital, Becker’s reported.
Cantley told Becker’s that Memorial counted on the pilot program’s payments to support the debt needed to finish the Belpre project, and that he cannot ask his board to approve that financing until the funds are approved.
“In my opinion, the rural hospitals may be the ones that need the most attention,” Cantley told Becker’s. “I think this is the right use of CMS’ Medicaid state-directed payment program, and this is where it should be focused because these are the hospitals that are most vulnerable.”
The state says its part of the work is done. Stephanie O’Grady, chief communications officer at the Ohio Department of Medicaid, told Becker’s the department has supported the federal review process by providing requested information and completing all required submissions, and that the program is currently awaiting CMS action.
Ohio’s proposed program relies on county-level funding, similar to programs in Texas, New Jersey and Florida that CMS has approved, according to Becker’s. In September 2026, CMS approved $12 billion in Texas Medicaid funding after months of negotiations, a precedent Memorial’s leadership points to as it waits for its own answer.
For patients in Washington County and neighboring rural counties, the stakes are practical: rural systems run on thin margins, and supplemental Medicaid payments are part of how they keep services — including the maternity and children’s care the Belpre hospital is meant to expand — available close to home. The partnership behind that project is the same Akron Children’s network that this week opened a pediatric practice inside a Cleveland Boys & Girls Club.
Memorial is not the only southeast Ohio system working through payer pressure this fall: in Zanesville, Genesis HealthCare System recently reached new agreements with Aetna and CareSource after a dispute over denied claims. And Washington County residents are also seeing new local investment, including the Marietta Foundation’s $2 million matching campaign.
Cantley told Becker’s he remains optimistic that CMS will approve the pilot program. “I’m very hopeful that CMS will expedite its review and come to the conclusion we all anticipate — that this is an appropriate payment and one that was filed appropriately by the state of Ohio, approved by the governor, and should be released to be paid to its hospitals,” he told Becker’s.
What we know — and what we’re still waiting on. What is confirmed, from Cantley’s account to Becker’s and the Ohio Department of Medicaid’s response, is the size of the hold — about $80 million — and that the state’s submissions are complete and awaiting CMS action. What is not yet known is when CMS will rule on the pilot program, whether approval would release both pots of money at once, and how much longer the Belpre financing decision can wait before the construction timeline itself is affected.
What happens next sits with CMS: a federal approval would release the pilot-program payments to Ohio’s rural hospitals and, in Memorial’s case, unblock the financing decision its board needs to finish the Women and Children’s Hospital in Belpre. Until that decision lands, the $80 million — and the project counting on part of it — stays in limbo.
Photo: pasa47, CC BY