NOTE: This email was sent from Alan Levine, Ballad Health’s president and CEO, to all Ballad Health team members on Thursday, July 3.
Good morning:
By now, you are likely aware that the reconciliation bill, otherwise referred to as the “One Big Beautiful Bill,” is set for final passage by the House of Representatives. Ultimately, the House took up the Senate bill without making any changes. In an effort to get the bill on the President’s desk today, as requested by the President, the House met throughout the night to take the procedural votes necessary to pass it today.
I leave it to each of you to determine what in this bill you like or don’t like. There are very important policy issues addressed in the bill, and I encourage you to take the time to learn about it if you haven’t. With such a large bill, which contained so many broad policy issues, there was simply no way to address some of the issues we raised related to the Medicaid Provider Taxes and State Directed Payments. This issue did not receive a hearing in the Senate, and the amount of time from passage by the Senate to transmission to the House was so small – particularly given the deadline of today to get it done – there just wasn’t a chance for Congress to consider the issue.
That having been said, I do believe the members understand the complexity of the problem, and as our own Congressman from Virginia, Morgan Griffith, said during the Rules Committee meeting, “this is not the last bill this congress will pass.” He further stated his goal of addressing access for rural communities.
Our job this past few weeks has been to be transparent about these policy areas in order that our elected officials have better visibility into how these national policies affect us here at home. The good news? I believe all our locally elected officials were listening, and I believe they will be a part of the solution.
The other good news? Because of the hard work of Senators Hagerty and Blackburn, and the support of Rep. Harshbarger, the Trump Administration approved Tennessee’s waiver this past Monday. This waiver request allowed Tennessee to increase the provider tax to the 6% cap, and to use the optimal state-directed payments. To suggest this was a life line for Ballad Health, and every other system in Tennessee, would be an understatement. This provides financial stability for the next 2½ years, while we work to mitigate the cuts that will begin January 2028.
One problem unique to Ballad Health is that we have made it a priority to rebuild the hospital in Unicoi County. We were enthusiastically moving full speed ahead with this project, even securing state funding to supplement what Ballad Health was contributing – thanks to the hard work of some in our legislative delegation, including Tim Hicks, Gary Hicks, Rebecca Alexander, Bud Hulsey, Bobby Harshbarger, Rusty Crowe, Timothy Hill and, of course, Renae Jones. On so many issues, these great leaders have supported our efforts to expand access and serve our communities. I plan to consult with them and with our U.S. Representatives and Senators in order to determine a path forward for Unicoi County.
The issue for us is this: It is a $50 million investment of private and public money that will lead to a new facility being open sometime by January 2028 – right at the time when Ballad Health would take the first tranche of cuts from the Reconciliation bill – which could amount to more than $25 million. In our best year, Ballad Health’s operating income was around $30 million. So, in the first year of cuts, we’d effectively lose almost our entire operating income. Each of the succeeding four years, the cuts grow to more than $125 million. Obviously, this is a massive and unprecedented cut which will have enormous effects on our system, if not mitigated. Without knowing what the mitigation might be, or if there will be, it would not be responsible for us to commit $50 million of public and private funds to something that might not be financially sustainable.
To be clear: We are NOT saying we will not be building this hospital. For the moment, we need to step back, huddle with our elected leaders and agree on how best to deal with this. Those with whom I’ve already spoken understand the issue we are raising, and none have asked us to do anything irresponsible. I think everyone is poised to first learn what the real impact of the legislation is, and then what our options are. We will actively be engaged in those discussions – with a goal of moving this project forward.
Other projects already underway will continue – the emergency department at Johnson City Medical Center, our investment into cancer technology, and other equipment replacement. Our ability to do these projects is due almost exclusively to the hard work done by our team and our U.S. Senators Hagerty and Blackburn to get the Trump administration to support Tennessee’s waiver request. That single action made a huge difference.
We will plan to do a Microsoft Teams Town Hall next week, and I will plan to participate, give some updates and answer any questions. Our team is already working with our colleagues across Tennessee and Virginia to come up with strategies to help mitigate these cuts. I have 100% certainty it was not the intent of our federal lawmakers to target rural areas, and I firmly believe they will be eager to be part of a solution to this.
I hope you all have a wonderful Fourth of July. God bless each of you and your families on this extremely special day of independence! 250 YEARS! God Bless the United States of America!
Alan
