ATLANTA — Georgia Hospital Association officials say the industry has agreed on a plan that calls for extending and tweaking an expiring hospital tax scheme that provides a key chunk of state health-care spending.
The proposed changes would benefit private hospitals that lose money under the current design of the so-called bed tax, which is actually a levy on net patient revenue. The money is used as state matching funds to get federal money that increases Medicaid insurance payments to hospitals.
GHA executives said the changes would make the overall program more lucrative for the state without harming financially teetering hospitals that serve a large number of Medicaid patients, most of whom are children.
What to do about the tax will be a key issue for state lawmakers in their upcoming session that begins Jan. 14. If the tax expires with no substitute, lawmakers would effectively add $650 million or so to the fiscal year 2014 shortfall for the Medicaid insurance program for the poor, elderly and disabled.
That would force lawmakers to make steep cuts to the Medicaid payments for providers, replace the lost Medicaid money by cutting other public services or some combination. There is uniform opposition among Gov. Nathan Deal and the Republican legislative leadership to increase broad-based taxes as a way to handle budget woes.
GHA spokesman Kevin Bloye said hospital representatives have presented the plan to Deal and that he is generally supportive. Deal spokesman Brian Robinson did not immediately respond to a request for comment.
Deal will present his budget proposal after the General Assembly convenes.
Bloye promised that hospital executives, along with local and civic business leaders from around the state, will lobby for the plan. “We are arguing that this is an economic development and quality-of-life issue,” Bloye said. “It would be catastrophic to local communities” for hospitals to lose revenue, lay off health-care professionals and deny care to patients. “Some community hospitals would close,” he predicted.
But there is political pressure not to renew or replace the tax, led by anti-government advocate Grover Norquist, author of the famous anti-tax pledge that many Republican politicians, including Deal, have signed.
Currently, hospitals in Georgia pay a 1.45 percent levy on net patient revenue. That will yield about $234 million in the budget year that ends June 30. That money yields about $448 million in additional federal support for Medicaid. Hospitals then get a resulting 11.88 percent bump in their payment rates for treating Medicaid patients.