Memorial awaiting $80 million as payment delays slow hospital project
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MARIETTA -- Memorial Health System is awaiting about $80 million in anticipated Medicaid payments, a delay President and CEO Scott Cantley said is straining hospital operations and slowing financing for its women's and children's hospital project.
Cantley said the outstanding payments include about $60 million through the Rural Ohio Hospital Tax Pilot Program for 2025 and 2026, along with approximately $20 million in additional hospital payments for 2026.
The Rural Ohio Hospital Tax Pilot Program allows participating counties to assess hospitals to fund the nonfederal share of additional Medicaid payments. That funding draws federal matching dollars to increase reimbursement for care provided to Medicaid patients, according to Ohio's Legislative Service Commission.
Ohio Department of Medicaid identified Marietta Memorial and Selby General as participating hospitals and specified that the additional payments for inpatient and outpatient services require approval from the federal Centers for Medicare & Medicaid Services.
Ohio budget reports show that federal approval delays have held up supplemental Medicaid payments to hospitals statewide. In its January 2026 report, the Ohio Legislative Service Commission said only 1.5% of projected Hospital Additional Payments spending occurred in December 2025. The commission attributed the shortfall to pending approval from the federal Centers for Medicare & Medicaid Services and said approval delays also affected other state-directed payments.
Some payments subsequently moved forward, but delays continued. In its May report covering April spending, the Ohio Office of Budget and Management said the state was still awaiting federal approval for the 2026 Hospital Additional Payment program and other state-directed payments. Those approval delays accounted for roughly $1.6 billion in Medicaid spending below year-to-date projections statewide. The office said that gap was expected to narrow as federal approvals were granted.
Cantley said the anticipated payments support hospital operations and help provide the financial foundation needed to take on construction debt.
"When we borrow money, we have to pay it back, and we anticipated receiving those funds by now," he said.
The health system had planned to use debt financing to complete the women's and children's hospital. Although it recently completed the U.S. Department of Agriculture loan process, Cantley said the delayed Medicaid payments are complicating efforts to move forward with that borrowing.
Memorial hopes to finalize the financing this fall so it can order steel and begin erecting its building, he said. Much of the site work has been completed, while construction on partner Akron Children's adjoining building is progressing.
"Our building connects to that building, and as you can see, we've done a lot of the site work," Cantley said. "But we need to now start to go vertical, get some steel orders placed, and keep the project moving."
Cantley said federal approval of the anticipated payments within the next few weeks could allow Memorial to proceed with financing and maintain a potential fall 2028 opening.
The payment delays also affect expenses throughout the health system, he said, including nurses' salaries, supplies, equipment repairs and replacement beds and wheelchairs.
"Those are the funds that operate the hospital," Cantley said.
He compared the situation to a household waiting for a delayed paycheck and limiting purchases to essentials until the money arrives.
Philanthropic support has helped the construction project advance while Memorial works through financing, Cantley said. Donor contributions have not been affected by the Medicaid payment delays, and much of the donated money has already been received.
That support has paid for site preparation and other work needed before building construction can proceed, he said.
"Our donors have allowed the project to continue to move forward, even as we were completing the debt financing," Cantley said.
Completing the project, however, will require the USDA financing, he said.
Cantley said Memorial has been working with Gov. Mike DeWine's administration and the Ohio Department of Medicaid as state officials seek federal approval for the payments.
He said U.S. Reps. David Taylor, Mike Carey and Michael Rulli have contacted the federal agency on Memorial's behalf.
Despite the financing challenges, Cantley said the health system remains committed to completing the project and expanding care for women and children in the region.
"We're thrilled about bringing this project to life," he said.