CHA President on the Fiscal Cliff, the HHS Mandate and Taxpayer Funding of Abortion

Sister Carol Keehan discusses how Catholic hospitals are coping with the challenges generated by recent health-care-related legislation.

Sister Carol Keehan
Sister Carol Keehan (photo: Catholic Health Association)

Sister Carol Keehan is the president and CEO of the Catholic Health Association (CHA), an influential lobby that represents 600 Catholic hospitals and 1,400 long-term care facilities across the nation.

In 2009, Sister Carol played a significant role in negotiations to pass the Affordable Care Act (ACA), President Obama’s landmark health-care bill known as “Obamacare.” However, in the wake of this month’s “fiscal cliff” deal, legislators and the White House agreed to $15 billion in cuts to hospitals, a hit for CHA’s members.

Last year, after Health and Human Services Secretary Kathleen Sebelius approved the federal contraception mandate, Sister Carol raised concerns about the mandate’s narrow religious exemption, which excludes Catholic hospitals, and subsequently expressed support for the president’s Feb. 10 “accommodation” and related proposals that sought to pass on the costs for providing co-pay-free contraception, sterilization and abortifacient drugs to insurance carriers. However, in June 2012, the Catholic Health Association signaled that the accommodation was not acceptable and outlined proposals that would address the concerns of its membership.

Following the fiscal-cliff deal, Sister Carol, a member of the Daughters of Charity of St. Vincent de Paul, spoke with Register senior editor Joan Frawley Desmond about the outcome of the fiscal-cliff negotiations, her concerns about the next round of spending cuts this March, the HHS mandate and questions about tax-payer subsidies for elective abortions in the new health law.


The fiscal cliff deal approved on Jan. 2 included a reported $15 billion in cuts to hospitals for inpatient care and Medicaid payments, while blocking proposed cuts of 26% for Medicare reimbursement to doctors. What are your concerns about the impact of the fiscal-cliff deal, especially on your membership?

My first reaction is relief that we were able to get something done that prevented low-income and middle-income people from getting a huge tax hike when they could least afford it and that preserved continued unemployment benefits so that people will have a little more help while the economy gets better.

I was glad the doctors were not going to have to take a 26% cut, though [the fix for doctors] is only for a year, and we will be back with the same challenge then.

I didn’t really care for the fact that they paid for the fix for doctors with cuts to hospital payments, because they have already made cuts in funding to hospitals.

During negotiations leading up to the passage of the health bill, we agreed that, in the future, hospitals would take less reimbursement in two areas. First, in 2014, when newly insured people come into the system, we would take less than expected for annual inflation-adjusted reimbursements for Medicare. For example, instead of 1.5%, let’s say, we’d take 1%.

We also agreed to take a decrease in what Congress calls “disproportionate-share funds” for serving the Medicare and Medicaid populations who are very poor. Previously, when I ran a Catholic hospital, we needed the disproportionate-share funds to help offset the costs of taking care of charity cases and bad debt.

But in the negotiations for the ACA, we targeted 30-32 million of the 48 million uninsured to get insurance in 2014. Thus, half of [hospitals’ financial responsibility for] charity care and bad debt were removed. In exchange for that assistance, we had to accept cuts in funding of about $155 billion. We took the big reduction in order to be part of the solution that became part of the Affordable Care Act [ACA].

Now, with the fiscal-cliff deal, we have a new reduction before we even get these new people insured. It’s not a catastrophe, and it’s not a surprise; but it’s not a welcome event.


What could happen when Congress returns to further negotiations on spending cuts and reducing the national debt in two months?

We want to be certain that they don’t do anything that undermines efforts to roll out the Affordable Care Act as signed into law, such as changes in the number of people eligible for Medicaid expansion or the subsidies provided for state exchanges. If they modify those, they create a negative incentive.

Any kind of wholesale cut to Medicare reimbursement for physicians or hospitals would be a problem.

Our members are really concerned that we don’t have excessive or unwise cuts. We need to make the transition to new models of care in a way that doesn’t undermine our ability to provide excellent care to everyone. We need good equipment; we need to pay employees justly; and we want to be able to welcome people who can’t get care at other facilities. We should be known for our willingness to reach out to people.

Our members look forward to more people having their own health insurance and to getting people enrolled as quickly as possible.


Many hospitals, including Catholic hospitals, have been crushed by the costs of serving undocumented workers, yet the Affordable Care Act doesn’t provide funding for that group of patients.

We have known all along that the ACA would not be passed if we included the undocumented. I have said that if we get help for 30-32 million uninsured Americans then it’s even more incumbent on us to reach out and help immigrants. And we need to keep pushing for coverage for them.

At CHA, we have said that the Gospel calls on us to respond to the needs of the undocumented. When they are here and are sick, we need to help them.

This is part of the total context of a just immigrant policy. We don’t have that. It will be a different world on this issue with the new Congress because of the election.


You have been a strong supporter of the new health bill. What’s your assessment at this point?

It leaves some issues unresolved, like the immigrant question and fixes for doctors. But health-insurance companies now have to spend 80%-85% of [their budget] on health care, not on high salaries or stock dividends, and that is a good thing.


Some critics and supporters of the president say that what he really wants is a single-payer health-insurance system.

As someone who has spent untold hours in negotiations with the president’s senior staff and at Health and Human Services, and has talked with him personally, I don’t see him taking that position. But there are people who do not like this multipronged approach to health insurance for our nation.


Any comment on recent court decisions dealing with HHS mandate cases? A New York district court approved a preliminary injunction for a Catholic health-care facility that challenged the federal mandate, and the D.C. Circuit Court of Appeals directed the administration to provide updates on its efforts to finalize proposed rules that address the concerns of religious institutions.

What we said in our June 15, 2012, letter to the Department of Health and Human Services is that [its] current proposal was not the best way to fix [the mandate]. It needs to be fixed.

After the accommodation was announced on Feb. 10, I was very pleased that they recognized the need to change it.

This issue became very polarized during the election season. I also didn’t think it would get more priority than the fiscal cliff, so I haven’t been holding my breath.

But they have put out an intent to publish the rules, and now it is time to do it. I look forward to getting it addressed. I look forward to giving my best advice.


In CHA’s June 15 letter to the HHS commenting on the proposed rulemaking, you ask for an expanded religious exemption to include “Catholic hospitals, health-care organizations and other ministries of the Church.” You also suggest that if the federal mandate is retained, the administration “should find a way to provide and pay for these services directly without requiring any direct or indirect involvement of ‘religious employers,’ as broadly defined.”

We put out our position [in the June 15 letter] after consultation. We have tried very hard to follow the comment rules appropriately. For example, there is no negotiation, the [HHS] officials are supposed to be listening and not negotiating or modifying until the comment period is over. Therefore, we do not talk with them about “Can you do this?” or “Would this be possible?” We simply either tell them in writing or verbally and in writing what we think.

We have a responsibility to [follow the comment rules]. We have not had a public statement since our letter. We gave out recommendation on what we thought was the best way to fix it, but we never said it was the only way.

We have been told by the bishops’ leadership that they were pleased with our letter. We stay in contact with the bishops and the leadership of the conference staff.

The bishops have a bigger fish to fry than I do. They have the whole of Catholic ministries — universities, parishes and charities. I have a very small piece compared to that challenge.


Has the intensity of the controversy ignited by the mandate surprised you? Are we entering a new, more secular era with more pushback for Catholic institutions?

Some of this is recycled, and it sometimes stems from anti-Catholic motivation, sometimes [from] competitive [tactics]. As someone who did ob-gyn at a Catholic hospital, I can recall people starting rumors about Catholic health care. A physician tells his patient, “I don’t want to deliver you in a Catholic hospital because they always want to save the life of the child, and I want to save your life.” We often dealt with this kind of misinformation, and yet our record on maternal and infant mortality is enviable.

If we know history, we should not be surprised. Earlier generations faced this, and worse, at times. We need to deal with it in a Christian manner.

We need to have a strong obstetrical presence in this country. If we claim to value life, we must put our time and treasure at the service of life. We cannot say, “You should not have an abortion,” and then say, “Go to another hospital for your care because we can’t do it.”

We need to provide high-quality care for any mother having a baby, whether she has resources or not. In a pluralistic society, we need to maintain the ability to be that strong presence.


Last year, in a Jan. 24, 2011, letter to Rep. Joseph R. Pitts, R-Pa., you supported the proposed Protect Life Act, H.R. 358. You stated: “While we continue to believe the current provisions of the Affordable Care Act prevent federal funding of abortion, your legislation will provide further protection by codifying the Hyde Amendment relative to the new health-care-reform law.” Are you still confident that this is the case?

I have not heard anybody talking about doing an “end run” around the Hyde Amendment. If that were a possibility, I would hear that from pro-life legislators.

Members of Congress and their staff understand how important the Hyde Amendment is to CHA.


 However, last year, the USCCB raised concerns about an ACA final rule that “requires many health insurers to charge all enrollees for elective abortions. This requirement has surprised many people, who thought that they had been assured the new health-care-reform act would not make taxpayers fund abortions.” Your response?

The president made a commitment before a joint session of Congress that abortion would not be federally funded. The bill allows plans in the exchanges that want to offer abortion to do so by charging a separate premium each month for it. This must be audited every year to assure that the separate premium is sufficient to cover the costs. No part of the federal subsidy given to low-income workers in the exchanges can be used for the separate abortion premium. It covers only the basic health-care components of the basic health-care plan.

We have followed this very closely and were pleased to see two separate federal judges rule there was no federal funding of abortion in the Affordable Care Act.