The head of Northeast Georgia Health System rejected on Wednesday a plan being considered by Gov. Sonny Perdue to charge hospitals and health insurance companies extra fees to help offset the state’s budget shortfall.

Jim Gardner, chief executive officer of Northeast Georgia Medical Center and Health System in Gainesville, characterizes the fee as a "bed tax."

"It would cost us about $28 million a year," he said.

State officials say the new fees would help fill a $208 million hole in the Georgia’s Medicaid budget and beef up a spotty trauma care network that researchers say leaves 700 people dead each year.

But Gardner said when hospitals are struggling because of inadequate Medicaid reimbursement, it makes no sense to try to pay for Medicaid by taxing hospitals.

He said the medical center’s lobbyists will be contacting state legislators, urging them to reject the governor’s proposal.

The fee proposals go before state lawmakers when they convene in January. Health care industry advocates say the fees could lead to cutbacks in service to Georgia’s poorest residents because insurance companies and hospitals will have to scale back to pay the state.

The state is trying to deal with an overall budget shortfall of $1.6 billion to $2 billion or more because of declining tax revenues.