Behind the Bill: What the One Big Beautiful Bill Act Means for Hospitals and Health Systems

00:00:01:02 - 00:00:31:24
Tom Haederle
Welcome to Advancing Health. The deep budget cuts to Medicaid and other aspects of health care recently signed into law usher in a new era of challenge and uncertainty for care providers. In today's podcast, hosted by Tina Freese Decker, president and CEO of Corewell Health and the 2025 board chair of the American Hospital Association, AHA president and CEO Rick Pollack unpacks the massive legislation and talks about where we go from here.

00:00:31:26 - 00:00:55:08
Tina Freese Decker
Well, hello everyone. Thank you so much for joining us today. I'm Tina Freese Decker, president and CEO of Corewell Health and board chair for the American Hospital Association. And as I was thinking about what our topic should be for this month, there's no other topic as front and center on everyone's minds and health care right now than the one big Beautiful Bill act, which President Trump signed into law on July 4th.

00:00:55:10 - 00:01:23:29
Tina Freese Decker
This sweeping package enacts many of his legislative priorities, including taxes, border security, and deficit reduction. But the bill also includes significant policy changes to Medicaid and to the health insurance marketplace. So, given all that is just played out and all that lays ahead of us in our current advocacy environment, I thought the very best person to have on this podcast today was AHA president and CEO Rick Pollack.

00:01:24:01 - 00:01:47:15
Tina Freese Decker
So Rick, thank you for joining me today. And I also just want to express my gratitude for you and the entire team for all that you've been doing. I know there have been texts, phone calls, meetings, 3 a.m. discussions, all of that. You have done such a wonderful job and we're so appreciative of the work that you have to get our message out and to talk about the people that we are caring for.

00:01:47:18 - 00:01:59:18
Tina Freese Decker
And you and your team are also doing all these things to track the issues on behalf of our field and to really focus on blunting the cuts as much as possible. So thank you for joining us. We appreciate it.

00:01:59:21 - 00:02:14:17
Rick Pollack
And by the way, I know you were a part of some of those texts and, late phone calls, but hey, thanks for inviting me to be with you. You know, we work to put this forum in place with one of your predecessors about six years ago. But this is the first time that I've been the guest of a chair.

00:02:14:20 - 00:02:32:24
Rick Pollack
And along those lines, I want to express my appreciation to you for all of your leadership and the support that you've provided to me, the association staff, and the entire health and hospital field during what is really been an unprecedented time, and your strategic advice and counsel has been invaluable. Thanks so much.

00:02:32:26 - 00:02:54:08
Tina Freese Decker
Thank you. So this year has been a year of challenge and uncertainty. And I know that all of our member hospitals and our health systems recognize the work that you are doing. And we appreciate the insight, the updates, the analysis that you're able to share. Your daily messages, I always look to those. So let's jump in and talk about what's going on.

00:02:54:10 - 00:03:11:21
Tina Freese Decker
So I know you and your team have put out so much information. There's been coverage from other media over the past several months and weeks. But I'll start just by asking about any insights and quick overview that you have on the major elements and how we got to this point.

00:03:11:23 - 00:03:31:27
Rick Pollack
Yeah. The past seven months has been a real challenge working on this. And very honestly, you know, the passage is extremely disappointing and represents a difficult time for health in America. You know, just from an overview, we were dealt a pretty tough hand. But we feel like we left everything on the field in this fight.

00:03:31:29 - 00:03:57:00
Rick Pollack
And despite months of clearly demonstrating the implications that these Medicaid proposals would have on the patients and communities we serve, particularly vulnerable populations, Congress enacted these significant cuts. And no matter how many times we have repeated it, the magnitude of these reductions and the number of individuals that will lose health coverage cannot simply be dismissed as waste, fraud and abuse.

00:03:57:02 - 00:04:40:16
Rick Pollack
Because the faces of Medicaid include children, our disabled, our seniors, veterans, farmers, ranchers and hardworking low income people. And, we have and we will continue to make the point that the real life consequences of this are going to negatively affect access to care for all Americans, not just Medicaid beneficiaries. And I know that you and the board and our entire AHA team are absolutely committed to working with all stakeholders to mitigate the impact of these cuts, wherever possible, because our goal is obviously to make sure that hospitals can remain open for the communities they serve and the people that they take care of.

00:04:40:23 - 00:05:05:28
Rick Pollack
Now, in terms of the question you really asked, in terms of what's in the bill, right? We're still obviously digesting parts of it. And, you know, these bills come together rather quickly and in an opaque way. I think of it in three parts, okay? Part one is just to provide some perspective. And this was the president's domestic policy agenda that was driven by tax cuts, border security and defense spending.

00:05:05:28 - 00:05:44:16
Rick Pollack
Medicaid became a primary offset to fund those other priorities. And they use this reconciliation process, a rather sharp tool that is very partisan that both parties use on occasions. Now, as it relates to Medicaid, some themes. One is work requirements. That was part of their objective. And of the $900 billion in cuts, $326 billion come from work requirements. Coverage for non-citizens and eligibility restrictions of all kinds, that accounts for $250 billion of the roughly $900 billion.

00:05:44:19 - 00:06:09:18
Rick Pollack
And then things like waste, fraud and abuse - and unfortunately, they characterized provider taxes and supplemental payment programs in that category -  that accounted for about $340 billion. The other theme that was embedded in all of this; it wasn't the repeal and replace of the Affordable Care Act, but it was a disassembling of pieces of it through the back door, if you will.

00:06:09:20 - 00:06:31:24
Rick Pollack
So that's part one. OK? Part two is the impact on coverage that we talked about before, 11.8 million people that will be displaced from the health care coverage. And I got to say, we were probably one of the only mainstream groups that gave voice to this in a high profile manner. Part three is the impact on hospital finances.

00:06:31:24 - 00:07:03:17
Rick Pollack
So that's that $340 billion that come in two flavors, again, provider taxes and state directed payments. And you know that probably these two issues probably got the most attention at the very end in particular. And for provider taxes and state directed payments, both of these provisions take effect in 2028. And we push those years out as far as we could, for provider taxes, for non-expansion states, the rates are frozen. For expansion states,

00:07:03:19 - 00:07:27:10
Rick Pollack
they are, you know, come down to 3.5% from the maximum of 6% in increments of 0.5% over several years for state directed payments. Non-expansion states would have to go from the average commercial rate to 110% of the Medicare rate. For expansion states, they'd have to go to 100%, and they're reduced to that amount from where they are

00:07:27:12 - 00:07:33:26
Rick Pollack
10% a year until they reach those levels. Those are probably the biggest pieces.

00:07:33:28 - 00:07:39:24
Tina Freese Decker
And I know there's some small wins, things that we were able to keep out of the bill. Can you tell us about some of those?

00:07:39:27 - 00:08:00:23
Rick Pollack
Sure. One of them was that, you know, the dynamics of this whole process. You know, the fact is, is while we have these large reductions, people wanted to go further. You know, in the House of Representatives, the Freedom Caucus, they wanted to go further than where we ultimately came out. That was a real tough thing to hold them back. In the Senate,

00:08:00:26 - 00:08:23:27
Rick Pollack
Senator Rand Paul of Kentucky, Senator Cynthia Lummis of Wyoming, Senator Mike Lee of Utah, Senator Ron Johnson of Wisconsin, Senator Rick Scott of Florida. They all wanted to go further than this. And in fact, Rick Scott offered a very dangerous amendment that we killed at three in the morning. I think it was on a Sunday, in the Senate, that would have changed the FMAP map for expansion states.

00:08:24:00 - 00:08:45:09
Rick Pollack
One of the small wins - I think it's actually a big win - was preventing it from even being worse. Another key outcome that I referred to before, which was not easy to achieve and we had to do it along the way, was delaying the effective dates and creating phase-ins and phase-downs to avoid abrupt changes. That was really important.

00:08:45:11 - 00:09:07:01
Rick Pollack
And then working with our board and working with our regional policy board and consulting with executives and special strategy sessions and consulting with the allied hospital associations, we established some priorities as we went into this. We said, we don't want this to become block grants. We don't want to see per capita caps on any piece of this.

00:09:07:04 - 00:09:35:21
Rick Pollack
We don't want to see any cuts to the core FMAP rate that the feds match the states with. We wanted to preserve the provider taxes and the supplement of the state directed payment programs, and we knew that that was going to be a big fight. That was one of the biggest fights. And you know, that has been under a microscope since the George H.W. Bush administration and administrations on both sides of the aisle.

00:09:35:23 - 00:10:02:06
Rick Pollack
And people wanted to eliminate that. We're pleased that we held the line on those and at the same time we're pleased that site neutral and 340B and tax exempt status never crept into this. I would also just say that we were also pleased that we were able to repeal the nursing home staffing ratio rule and have a modest physician fix in there, and there is this modest rural transformation fund.

00:10:02:08 - 00:10:17:16
Rick Pollack
It's hard to call all of these things wins, but they were substantial things that did not occur. I never thought I would say that a $50 billion grant program is modest, but in the scheme of things, that fund for rurals is modest.

00:10:17:19 - 00:10:40:08
Tina Freese Decker
It is. And one of the things you talked about is the phasing in. I do think that's really helpful, because part of leading an organization, as you know, is navigating uncertainty and then helping us understand where we're going in the future. And when you start to understand where things can be and a timeline for that, and having the ability to use that time, it helps us make decisions that are needed.

00:10:40:10 - 00:10:59:26
Tina Freese Decker
And so I think that is a win to have greater certainty about what could be coming forward. So as we think about what's happening now, the AHA I know is, committed to working with all of us to mitigate the impact of these cuts. And you have a lot of resources that are available. What is our association's focus now?

00:10:59:29 - 00:11:19:02
Rick Pollack
The immediate focus right now is going through the actual law with the tooth comb. Because when you do something that is constantly changing and done in a fairly opaque way, you know, in the middle of the night and all that, you know, there are things that you find in there that, frankly, need to be corrected in the nature of technical corrections.

00:11:19:02 - 00:11:48:00
Rick Pollack
But then there's the policy things that we have to better understand. So we're in the process right now of coming up with detailed legislative advisories that will provide to our members to make sure they understand the implications. And by the way, one of the interesting things, and we've seen this in the past, when Congress uses this reconciliation process to ram things through, and they don't have a conference committee to reconcile our differences between the House and Senate, in this case, the Senate just jammed the House, which is not untypical.

00:11:48:06 - 00:12:13:04
Rick Pollack
When you don't have a conference committee, you make mistakes that aren't caught. Conference committees give you the ability to catch things and avoid the need for a technical corrections bill, which will be inevitable after something like that. The second one is we're working to provide resources on operational actions that can be taken to create additional efficiencies that hospitals might want to consider.

00:12:13:06 - 00:12:54:28
Rick Pollack
How can we work with individuals to ensure that they retain eligibility through these programs and not inadvertently get thrown off Medicaid because they didn't meet a work requirement or community service requirement that they could have met? We need to share best practices around revenue cycle improvements and operational efficiencies in that regard. We need to talk about - and you've been such an advocate for this - care delivery transformation that include innovative staffing models and strategic collaborations. And we need to maximize the use of technology, something that you've also been a real advocate for, related to appropriate uses of automation, remote care, creating digital front doors, just to name a few.

00:12:54:28 - 00:13:29:06
Rick Pollack
So we want to help the members in terms of trying to manage the situation. The third thing that we're going to be focused on, frankly, is setting the predicate for making policy adjustments going forward to try to come back and reconsider some of what they've done and to try to get further mitigation. As one of my colleagues said in a meeting that we were in, there are dates and rates that can be revisited, but it depends on us to tell the stories about the potential impact that this will have on patients and communities that we serve.

00:13:29:08 - 00:13:39:26
Rick Pollack
And if we can't tell those stories in a very compelling way, we're not going to get the attention we need to get people to go back. So those are the three things that were immediately focused on in the aftermath.

00:13:39:28 - 00:14:02:26
Tina Freese Decker
Well, Rick, what you just talked about - this telling of the stories and the importance of amplifying our voice, sharing testimonials and data that demonstrate what these cuts mean to us, what could be coming in the future with other things. I know advocacy isn't done yet. Can you speak to the importance of those continual grassroots advocacy, and also just a recognition to our members.

00:14:02:26 - 00:14:18:16
Tina Freese Decker
You showed up, you really showed up and the members of Congress understand more about our hospitals, health systems in every part of the area. And so we appreciate that, but it's not done. So can you give us some thoughts about what's the next there? Why do we need to continue to do this?

00:14:18:18 - 00:14:49:29
Rick Pollack
Yeah. Well, there are two parts to your question. One is what's up next, which I only partially answered in the context of this bill. And we can come back to that in terms of what may happen in the fall that we're getting ready for. But you just raised a really important issue around our voice and the stories. And, you know, when I think about how we try to influence things and influencing policymakers, regulators or even the media for that matter, I always think about our levers of influence, the levers of influence that we apply.

00:14:50:02 - 00:15:15:21
Rick Pollack
And, you know, some of it is shoe leather lobbying, right? But also building alliances with others, having data in the 30-second bite world that we live in, framing issues, advertising on multiple platforms, using the Coalition to Strengthen America's Healthcare, convening events, offering alternatives to the problems that they're dealing with. Our political action committee is obviously a tool.

00:15:15:24 - 00:15:38:13
Rick Pollack
Self-regulation is another tool for a lever of influence. And we've done that with billing and collection guidelines with 340B good stewardship guidelines. And under your leadership this past year, a checklist on preserving public trust and accountability. All of those things are levers of influence. But getting back to where you started, grassroots is king.

00:15:38:15 - 00:16:02:03
Rick Pollack
Grassroots is absolutely king. And I'll share with you the perspective of having been a former staffer on Capitol Hill, where I was a legislative assistant, I dealt with education and labor issues, not health issues. It doesn't matter, though, because when I was approached by lobbyists, representing education or labor organizations at the national level, of course we paid attention to them.

00:16:02:05 - 00:16:31:17
Rick Pollack
But when it was reinforced by the folks from back home, by the state associations from back home, it really made a very powerful and compelling case. And along those lines, so important for us to not only evolve our C-suites, but our trustees and our employees. The other thing that's important to remember that grassroots for hospitals is that, you know, unlike a lot of other organizations, we're not a single issue group.

00:16:31:19 - 00:16:55:11
Rick Pollack
You know, it's not like we're all about, you know, one particular issue. And the reason I mention that is that not only do we need to be advocates at times, but we need to be educators. We need to be seen as a resource to the legislative assistants to the members of Congress themselves. Because we're the experts and, you know, many of the legislators, they don't serve on the key committees.

00:16:55:14 - 00:17:16:15
Rick Pollack
They rely on us for information. And we want to not always be asking for something. We also want to be a resource to them. And that's why your voices of our members, are so important. This experience has made us grow. You always talk about how hard things can make us grow. This this is making us grow.

00:17:16:20 - 00:17:35:15
Rick Pollack
And one of it is that I think that members of Congress understand hospitals better than ever before. Last point about this. When we send out those alerts and sometimes I know we send out probably too many of them, but it's been a rough seven months, right? When a legislator doesn't hear from you, you know what they think?

00:17:35:22 - 00:17:44:29
Rick Pollack
They think that everything's okay. So as long as they don't hear from us, they're just going to assume they can do whatever they want. So that's why voices from back home are so important.

00:17:45:01 - 00:18:01:29
Tina Freese Decker
That's critical. Thank you so much and thanks for sharing, you know, your experience and doing it for many years in education and now in health care because it helps us understand how it feels on the ground. So back to the other question, what's coming forward this fall?

00:18:02:02 - 00:18:22:22
Rick Pollack
You know, one of my colleagues that you know well, Stacey Hughes, our executive vice president, has talked often about "forcing events." You know, Congress is like college students, they don't do anything unless there's a deadline and they don't do it until the end, right? And we just went through one with one big bill because one of the forcing events there was the expiration of tax cuts,

00:18:22:24 - 00:18:41:22
Rick Pollack
where people's taxes would go up if they didn't do what they did. And also increasing the debt limit, which is always a political hot potato. Those were forcing events. Next up forcing event is going to be the funding of the government. Federal fiscal year ends on the last date of September. New federal fiscal year is October 1st.

00:18:42:00 - 00:19:02:12
Rick Pollack
And that's a forcing event. That provides a platform that means they have to do something unless they shut down the government, which is a separate strategy and issue, depending upon how you view it. But the other forcing event before the end of the year is the need to extend the expiring tax credits under the Affordable Care Act.

00:19:02:14 - 00:19:34:16
Rick Pollack
These tax credits basically help low income people buy private insurance on the health care marketplaces through these tax credits. To extend this for another ten years cost $350 billion. I don't know that we're going to get ten years but we'll take whatever we can to keep these going to help folks buy private insurance on the exchanges. Because if this isn't done properly, another 6 million people could lose coverage or a lot more people can see their rates go up.

00:19:34:18 - 00:20:00:12
Rick Pollack
So, that's the next thing that's up. And the platform for taking care of that will probably be the government funding bill. Now we have other business that we also have to take care of in that context, because we have expiring provisions, okay? Forcing events. The waivers for telehealth, they expire at the end of September. The waivers for hospital at home, they expire at the end of September.

00:20:00:14 - 00:20:23:00
Rick Pollack
The Medicaid dish cuts that we have been keeping on ice for 14 years - the moratorium on those expire over the course of the next couple of months. So we got to make sure that the government funding package which is really the forcing event, includes these important issues. And they're going to want to offset the cost of this.

00:20:23:00 - 00:20:45:04
Rick Pollack
These are all spenders, right? And we got to make sure that site neutral and 340B doesn't creep in as an offset. I know that they're probably most interested in looking at the EMA plans, particularly given some controversial things that have come out around coding practices. And that's probably at the top of their list.

00:20:45:07 - 00:21:10:24
Rick Pollack
But we're on guard here. The other things that are coming at us is the annual rulemaking process for Medicare. You know, one of the things that's so lovely about our fragmented health care system, particularly with Medicare, is that every little piece of the system or big piece of a system, for that matter, has their own set of annual rules that not only set the rates but make policy and move billions of dollars around.

00:21:10:28 - 00:21:33:16
Rick Pollack
So we've got the inpatient rule, the outpatient rule, you know, go down the list. That's the other thing that we have to deal with over the next few months. And then, of course, two other big issues that remain high on our agenda is the bipartisan legislation we've had introduced to deal with workforce violence and our continued efforts to hold commercial insurance companies accountable for their behavior.

00:21:33:18 - 00:21:35:28
Tina Freese Decker
And you're also working on regulatory relief, too.

00:21:36:00 - 00:21:57:25
Rick Pollack
Oh, yeah. I forgot about that one. Yeah. Especially with, you know, Republican administrations and Republican congresses are always sympathetic to regulatory relief. And, we've sent the administration 100 ideas that we've collected from our members. I think we got 1200 suggestions, but some of them were duplicates, and we narrowed it down to 100. And then we came up with a top 15 list.

00:21:57:27 - 00:22:09:07
Tina Freese Decker
Well, Rick, is there anything else you'd like to share about what the American Hospital Association is continuing to do to protect and strengthen health care in all of the elements that you've already talked about. Anything else you'd like to add?

00:22:09:09 - 00:22:44:28
Rick Pollack
I just want to say this and, you know, we understand that, this is a period of change. It's a period of uncertainty. We have a lot of challenges in managing this current situation, but I also know that this field has been resilient over the years. You know, we've been through a lot, whether it's the Balanced Budget Act, dealing with Zika or Ebola, or Covid or United Change or IV fluid solution shortages. But this is a significant point in time in terms of dealing with the one big bill and trying to manage it and trying to revisit it.

00:22:45:04 - 00:23:15:00
Rick Pollack
So, you know, that's definitely there. But at the same time, there are some exciting opportunities ahead in our field. You know, you look at artificial intelligence and the opportunities for efficiency and patient safety and convenience and disease management. And we've made so many great improvements in quality and patient safety. And that's a whole area that we continue to all be focused on that we want to provide leadership and assistance in. And, you know, innovation that's occurring.

00:23:15:02 - 00:23:34:09
Rick Pollack
And I've had the opportunity to visit Corewell and see firsthand the innovations that you are doing there are just incredible in terms of science and research to improve care. And I know that hospitals are all working hard to redefine the "H" to meet people where they need the care and most importantly, to make it more convenient.

00:23:34:14 - 00:23:44:17
Rick Pollack
And all of those are on our list of objectives, because our job as the association is to help you and the members do your jobs more effectively.

00:23:44:20 - 00:24:10:09
Tina Freese Decker
All right. Thank you so much for always tying it back to the mission. To advancing health in our communities, to ensuring that we can take care of our communities and improve their health, because it really gets back to the people that we're serving every single day. And we know as I've interacted with many members of the AHA team that you always think about the people that we are serving and how to help them, as well as all of us that are doing that work.

00:24:10:12 - 00:24:25:10
Tina Freese Decker
So thank you for sharing with us what AHA is doing, what we've been doing for the last seven months, what's coming ahead for all of the work that you and your team have done on the behalf of our field. We'll be back next month for another Leadership Dialogue conversation.

00:24:25:13 - 00:24:33:23
Tom Haederle
Thanks for listening to Advancing Health. Please subscribe and rate us five stars on Apple Podcasts, Spotify, or wherever you get your podcasts.