News
Lawmakers in a corner on hospital tax
2/4/2010
Atlanta Business Chronicle - by Dave Williams Staff Writer
Thursday, Jan. 21, 2010
Some grumbling but little opposition to a proposed fee on Georgia hospitals and managed-care providers emerged Thursday during legislative hearings on Gov. Sonny Perdue’s $18.2 billion budget request.
The governor is calling for a 1.6 percent tax on hospitals’ net revenue and on premiums collected by managed-care companies to help plug a projected shortfall in Georgia’s Medicaid program driven by growing demand and the impending loss of federal stimulus funds.
Together, the two fees would generate nearly $345 million in state revenue and allow the Georgia Department of Community Health to draw down just more than $1 billion in additional federal funds.
Without those fee hikes, the state would be forced to slash Medicaid reimbursements to all health-care providers by 16.5 percent, health agency Commissioner Rhonda Medows told members of the House and Senate appropriations committees.
“That is not a sustainable alternative for the providers,” Medows said Thursday, the final day of budget hearings at the Capitol. “They’re businessmen. They cannot do this.”
Rep. Jill Chambers, R-Atlanta, expressed frustration at the concept of taking state money from health-care providers in order to give them back more federal money.
But Medows said the tradeoff would leave 39 hospitals across Georgia with large numbers of Medicaid patients net winners. Atlanta’s Grady Memorial Hospital, for example, would reap $12 million from Perdue’s proposal, she said.
On the other hand, Medows said 84 hospitals with few or no Medicaid patients would lose money.
While the General Assembly rejected the hospital tax last year, Rep. Mickey Channell, chairman of the House Appropriations Health Subcommittee, said lawmakers have no choice but to go along with the plan this time.
“I have not had a long line of people knocking on my door saying this is a good idea,” said Channell, R-Greensboro. “(But) we find ourselves in a box. … Medicaid is an entitlement. We have to serve that population."
