CATHOLIC HEALTH CARE PROVIDERS BRACE FOR IMPACT OF FEDERAL BUDGET BILL

The following information was released by the Catholic Health Association of the United States (CHA):

LISA EISENHAUER

McPherson

Danielle McPherson remembers the patients undergoing cancer care alongside her years ago who, unlike her, did not have private health insurance. She saw them drop out of treatment because they couldn't afford the care or they lost access to insurance programs such as Medicaid.

"I had a little bit of survivor's remorse, because the only reason why I was there and they weren't was because I was insured," McPherson recalls. "I did not have to have that hanging over my head, that somebody somewhere was going to pull my benefits from up under me, and I was going to have to fend for myself."

Now, as vice president of Medicaid managed care organizations and state government programs at Chesterfield, Missouri-based Mercy, McPherson worries that looming cuts to Medicaid that are part of the new federal budget bill will mean more Americans won't get needed health care.

"The unfortunate thing is that the people that are most impacted are the people who are most vulnerable," she says.

CHA has created resources for its members to use in advocating for preservation of the advance premium tax credits that help millions of Americans afford health insurance.

Mercy is among many Catholic health care and social service providers that are bracing for the drop in federal funding and looking to help people who will likely lose benefits figure out how to cope.

Millions expected to lose insurance

TheCongressional Budget Officeestimates that over the next decade, the One Big Beautiful Bill signed July 4 by President Donald Trump will mean about $1 trillion less in health care funding much of it for Medicaid and the Children's Health Insurance Program and increase the number of people without health insurance by 10 million.

If Congress doesn't extend the enhanced premium tax credits for low-income people who buy insurance on the federal marketplace, the office estimates 4.2 million more people will lose coverage. Those credits, available since early in the COVID pandemic, are set to expire at the end of the year.

Congress is still working on the appropriations bills that will reflect the tightened budget and regulators are still formulating the policies that will put the changes in place. Nevertheless, the bill is starting to have an impact. For example, in August Providence St. Joseph Healthcited the expected cuts in federal funding as one factorin announcing the closure of several programs and the loss of about 60 jobs in Northwest Washington.

Once the Medicaid cuts are fully in place, which is expected to take about 18 months, Trinity Health projects its bottom line will take an annual hit of about $1 billion. On average, Medicaid covers about 20% of Trinity Health's patients across its 26-state catchment area.

Slubowski

"We estimate about 105,000 of the Medicaid recipients that we serve now will be without coverage," says Mike Slubowski, the system's president and CEO.

He points out that besides the Medicaid cuts, Trinity Health is grappling with or monitoring other factors that are impacting its budget or could, such as:

A $1 billion annual budget gap due to cost increases from vendors and reimbursement rates from federal, state and commercial payers that are generally below the inflation rate.

A proposal by the Centers for Medicare and Medicaid Services to institute site-neutral reimbursements that would lower rates for procedures performed at hospitals.

Pressure by drug companies to end the 340B program that allows hospitals to purchase medication at discounted rates.

"It's sort of death by a thousand cuts," Slubowski says.

Repositioning

To deal with the financial pressures and figure out how best to maintain services, Slubowski said Trinity Health is "repositioning the ministry." The system's leaders are looking for areas where they can create more access and increase patient volume as well as where they can reduce costs and become more efficient.

"With 80% of our reimbursement coming from Medicare and Medicaid, the magnitude of financial loss means fewer services, longer wait times, staff reductions, and the potential closure of programs and facilities," Slubowski says."When people lose coverage, they turn to the ED for basic care. Overwhelmed ERs become even more crowded, delaying care for everyone and straining staff who are already stretched.Our entire health system and every community we serve will feel the effects."

Trinity Health's advocacy team is partnering with other care providers and advocacy groups, including CHA, to make its concerns known as regulations are drafted enacting the budget bill's policy charges.

Pontemayor

Assessing downstream effects

Paulo Pontemayor, senior director of government relations at CHA, says the association is focused on "understanding the downstream effects" of the budget bill on CHA members. As the regulations related to the budget bill take shape, he says CHA is using its voice in hopes of keeping the rules from being overly burdensome for care providers and recipients.

Pontemayor points out that Medicaid is a federal-state partnership, so within the federal guidelines, each state or territory adopts its own rules for the program. That means there are about 55 sets of rule revisions underway over the next 18 months and CHA hopes to have a say in them.

"We like to think we have more than a year to do this, but in terms of law and policy, a year is definitely not a long time," Pontemayor says.

CHA and others see work requirements, one new provision that will go into the regulations, as particularly concerning. States will need to verify every six months that adults without young children who are covered by Medicaid are working or doing community service at least 80 hours per month. CHA is updating and adding to itsMedicaid Makes It Possiblecampaign to offer members more resources. This includes information on how to prepare for and respond to the work requirement, which is expected to mean more paperwork for care providers.

In addition to its members, CHA is working with several groups to influence the revised regulations. They include Catholic Charities USA, the United States Conference of Catholic Bishops and a coalition called The Partnership for Medicaid, which members elected CHA to chair this year and includes clinicians, health care providers, safety-net health plans, and counties.

Preparing for more in need

Brian Corbin, executive vice president of member services at Catholic Charities USA, says his organization is bracing for both direct and indirect effects from the federal budget cuts. Catholic Charities agencies that provide behavioral health care and long-term nursing care likely will face funding cuts. Meanwhile, Corbin says people who lose their health insurance and benefits through the Supplemental Nutrition Assistance Program, which is also set to shrink, will turn to Catholic Charities and social service providers for help.

Corbin

"With these potential cuts in Medicaid and in SNAP logistics, we're preparing to see a lot more people who are going to need a lot more case management and or immediate help," he says.

How will Catholic Charities continue its work and perhaps meet an increased need? "We're hoping that philanthropy will be increased," Corbin says. "Our people are beginning to appeal already to the hearts and wallets of people to prepare. Hopefully, Catholic Charities agencies can work in closer collaboration with Catholic health systems to prepare together how local communities can respond to persons and families in need."

'The time for us to really shine'

As for educating recipients about new requirements for federal assistance, Slubowski says Trinity Health plans to redirect the focus of some of its community health workers to help Medicaid enrollees understand and meet new federal requirements for coverage.

McPherson says Mercy will call on its community health workers in the same way as well as rely on its playbook from the Medicaid redetermination process. That process was mandated by the federal government at the end of the pandemic, to determine which enrollees still qualified for coverage.

Mercy created various tools including a website linked to resources for enrollees and a dashboard that tracked retentions for caregivers to smooth the redetermination process. In the end, McPherson says, over 78% of Mercy patients who relied on Medicaid were able to prove that they still qualified for the program, compared to a rate of about 69% nationally.

McPherson admits being worried about the changes the budget cuts and related regulations will bring. "Unfortunately, we're in a dark moment, but it still means that we should rise to the occasion. It doesn't mean that we stop," she says. "I think this is an opportunity for us, especially Mercy, that is centered in doing the right thing for people, centered in dignity. For our patients, I believe this is the time for us to really shine."

Other provisions of budget bill

Along with tax cuts that will be covered in part by decreasing funding for health care and food assistance programs, the federal budget bill has many other provisions that have drawn less media coverage. Catholic health care and social service providers point out that while they oppose hits to social safety net programs, some of those other provisionsare welcome.

Brian Corbin, executive vice president of member services at Catholic Charities USA, and Paulo Pontemayor, senior director of government relations at CHA, cite four:

Expansion of the low-income housing credit.The bill doubles the amount that federal agencies can invest in low-income housing properties to a total of $4 billion per year. Catholic Charities agencies have partnered with other organizations, including Catholic health care systems, to tap the credits for affordable housing projects.

Increased child tax credit.The bill raises the maximum credit for each child under 17 by $200 to $2,200. Also, the credit will be adjusted for inflation each year starting in 2026.

Donations to private schools.A new credit will reimburse taxpayers for donations of up to $1,700 to groups that hand out tuition vouchers to attend private schools.The scholarships funded by those donations must only be available to students whose family household incomes were at or below 300% of the median income level in their area.Corbin says the credit will help "the Catholic education system to be in communities and neighborhoods that are struggling and gives kids an opportunity to go to private school."

Nursing home staffing mandate.The federal staffing mandate for nursing homes was delayed for 10 years. While CHA strongly agreed that adequate nurse staffing is essential for the well-being of nursing home residents, the association was deeply concerned about the final rules imposing a staffing mandate because of the nursing workforce shortage.