Religious groups weigh options on new requirement
Catholic hospital executives are pondering ways to comply with a new federal requirement to provide their employees with contraceptives the church considers unethical, while religious organizations examine ways to challenge the rule before it takes effect for them in 2013.
Two small religious colleges have already filed federal lawsuits in Colorado and Washington based on the interim final rule that was unveiled last year, and a spokeswoman confirmed that the U.S. Conference of Catholic Bishops in Washington is evaluating its legal options.
“It’s too early to say what kind of strategy the USCCB will decide on. There are many options. There is a legislative option, as well as a legal option. No decision has been made,” said Sister Mary Ann Walsh, spokeswoman for the bishops conference. “It’s a freedom of religion issue. It’s the government making incursions into the role of the church. It’s like the government jumping into the sanctuary and telling us what to teach.”
The Patient Protection and Affordable Care Act requires insurers to provide basic preventive-care services to beneficiaries without charging co-payments or deductibles, although the law allowed the HHS to define those benefits in the future.
Last July, the Institute of Medicine recommended that all Food and Drug Adminstration-approved contraceptives— including regular hormone-based treatments and emergency “morning after” pills—should be deemed preventive care and offered by insurers without patient payments. HHS’ interim final rule released the following month did just that, but it also raised the prospect that that the Obama administration would carve out exemptions for religious employers that consider contraceptives and abortifacients immoral.
On Jan. 20, HHS Secretary Kathleen Sebelius announced the policy that will be included in the upcoming final rule, which will allow exemptions only for not-for-profit organizations whose purpose is “the inculcation of religious values” and that primarily employ and serve people who share its religious tenets.
Critics say the definition clearly does not include religious hospitals, schools and social service agencies that employ and serve many people who do not share their religious beliefs. Federal officials said in the text of the interim final rule that the definition of “religious organization” was based on regulations in most states that exempt faith organizations from similar insurance-coverage rules.
“We are befuddled that this administration has taken a fundamentally hostile view toward
would do so in the next two to four years.
Dignity Health has not acquired a hospital since 2007, when it added St. Mary’s Regional Medical Center in Reno, Nev., and the system has been searching for a buyer for that 269bed hospital.
A published report quoted Dean saying officials from non-catholic hospitals interested in affiliating with CHW seemed reluctant about joining a Catholic system, worried that they’d have to become Catholic.
Dean downplayed that dynamic when asked in an interview to elaborate on how the system’s Catholic sponsorship may have derailed CHW’S previous efforts to add hospitals. “We had rapid growth over the last decade and two decades; that’s a misnomer and not a correct statement.”
The system reported $917 million in net income for fiscal 2011, which ended June 30, 2011, an 89% increase from $485.7 million in 2010. Operating income increased 138% to $197.6 million in fiscal 2011 from $83.2 million the previous year.
Though financial analysts say the move may aid Dignity Health’s expansion efforts, neither Moody’s nor Standard & Poor’s adjusted its credit ratings after hearing the announcement. Both companies said there hasn’t been enough time to review the changes and intend to monitor the long-term impact.
Martin Arrick, a managing director in S&P’S Public Finance Ratings Group, said dropping the church affiliation will accelerate merger and acquisition plans.
Dignity Health’s board of directors now serves as the top level of governance. Previously, the system’s six Catholic sponsoring congregations served that function. A new group, dubbed the Sponsorship Council, will now hold direct responsibility for the system’s Catholic hospitals and facilities.
The new leadership infrastructure makes Dignity Health unique, Arrick said. He views that as a positive, because prospective deals would allow the system to address problems that historically get ignored, such as supply chain consolidation. “I don’t think this structure, per se, speaks to whether a merger will or won’t ultimately be successful,” Arrick said. “I just think the structure makes it easier for Catholics and nonCatholics to work together, that’s a key point.”
Danello, meanwhile, suggested that friction with the church’s positions, in addition to the need for growth, may have motivated the restructuring, recalling that Pope Benedict XVI recently warned American bishops of a rising sect of radical secularism that threatens Catholic values in America.
In 2010, Chw-affiliated St. Joseph’s Hospital and Medical Center, Phoenix, provided a case study in that conflict after Phoenix Bishop Thomas Olmsted stripped the hospital of its official Catholic status.
Olmsted declared that the hospital’s staff violated church directives when doctors per-