The Georgia Senate approved assessing a fee on most hospitals to make up a nearly $700 million Medicaid funding shortfall in the state’s fiscal year 2014 budget on Thursday.
The Georgia Department of Community Health is governed by a nine-person board appointed by the governor.
Senate Bill 24 authorizes that board to create and assess a fee on hospitals to draw matching federal dollars for Medicaid providers. Medicaid payments to hospitals would rise by nearly 12 percent to offset the state fee. The legislature created the tax in 2010 with economic stimulus money, and it expires at the end of June.
The fiscal year 2013 budget shows $235 million in hospital provider fee revenue and $454 million in federal Medicaid revenue given to the state because of the fee, totaling $689 million, according to an information sheet about the legislation.
The issue isn’t just about hospitals, said Sen. Renee Unterman, R-Buford, who chairs the Health and Human Services Committee.
“This is about physicians, this is about nursing homes, and this is about dentists,” she said.
Senate members spent about three hours debating the fee, also known as the “bed tax,” and more than half a dozen amendments before approving it by a 46-9 vote. The legislation came from Gov. Nathan Deal’s office and was introduced by his floor leaders. It was amended and substituted in committee, and the Senate amended it before passing it.
“It was a significant legislative accomplishment for the governor, for everybody,” said Sen. Butch Miller, R-Gainesville. “We sent a strong message showing how much support there was for it.”
The bill, passed on the fourth day of the legislative session, is a major piece of legislation that is critical to passing a balanced budget as required by the state’s constitution.
Sen. Steve Henson of Tucker, leader of the Senate Democratic Caucus, said the bill was pushed through the process too quickly to really consider its merits.
“It wasn’t really a good bill because we didn’t have time to look at it,” Henson said. “They suspended the rules twice to have the bill rushed through the process, that’s why there were so many amendments the last day, so the bill definitely could have been improved. And really it’s a shame they had to rush it through the process like they did, just because they didn’t want people back home to know they were voting for a tax increase.”
Henson also said the bill should have started in the House as a revenue bill. The payment rate is expected to stay the same as the current fee, which is 1.45 percent of a hospital’s net patient revenue or 1.40 percent if the hospital is a trauma center. There are no numbers cited in the bill, but the Senate voted to amend the legislation to limit the board’s authority to raise the fee above what is anticipated to be appropriated.
“I’m suspecting this will be a test vote today to see how the Republican members of the Senate felt about raising taxes,” Henson said.
Miller said the bill was approved by a large majority of the chamber and was bipartisan.
“If it was a test vote, the governor won overwhelmingly,” Miller said.
During his State of the State address Thursday morning, Deal called for the General Assembly to approve a hospital provider fee to shore up Medicaid funding and prevent hospitals from closing. An issue with the current fee is that hospitals that have more Medicaid patients benefit more than those with fewer Medicaid patients. The Georgia Hospital Association has worked with hospitals to adjust the formula to mitigate the difference. If the tax expired, the state would cut reimbursements by 20 percent, Deal said.
“Since we cannot adjust benefits, the reimbursements to hospitals would be the only way to keep the program solvent,” Deal said in his address.
Amendments to the bill that failed included proposals to extend the current law, expand Medicaid and lower the authorization period from four years to two years.
The bill now heads to the House chamber, where it will be assigned to a committee and considered.