Senate Republicans say they are looking for ways to safeguard rural hospitals from proposed cuts to a key Medicaid funding method, amid concerns from the powerful hospital lobby and others that the budget reconciliation bill could force many facilities to close.

Senate Republicans are taking Medicaid cuts even further than their House counterparts with legislation that targets hospital payments.

WASHINGTON—Senate Republicans’ plan to extract more savings from Medicaid as part of their revised tax and spending package triggered a backlash within the party, raising concerns that leaders could miss their self-imposed deadline of getting the bill to President Trump’s desk by July 4.