Hospitals, insurers likely to avoid new fees

The federal stimulus package is expected to deliver a bonus for Georgia hospitals: terminating a state plan to tax their revenues.

The addition of $1.73 billion in stimulus aid for the state Medicaid program —- including $790 million next fiscal year —- has almost certainly killed the proposed levy on hospital revenues, according to legislative leaders and health care industry officials.

A similar tax on health insurer revenues appears to have died as well, amid the strong anti-tax sentiment among state legislators.

Gov. Sonny Perdue proposed the levies to fill a projected $200 million shortfall in Medicaid —- which covers more than 1 million poor and disabled Georgians —- plus to help fund the state’s trauma care network.

But what will replace that trauma money, and the creation of a permanent source of funding, are far less certain.

A spokesman for Perdue said this week that the fate of the two taxes has yet to be finalized. “We still don’t have a full picture of the impact the stimulus will have on 2010, so it’s a little too early to know what needs it might meet,” said the spokesman, Chris Schrimpf.

Meanwhile, the hospital tax hasn’t won many admirers among legislators.

“I don’t think there was much momentum for it,” said state Rep. Mickey Channell, (R-Greensboro) head of a House Appropriations health subcommittee. “It appears that this [Medicaid stimulus funding] makes the hospital tax completely unnecessary.”

That would be “a godsend,” said Jimmy Lewis, CEO of HomeTown Health, an association of rural hospitals in the state. Many cash-starved rural hospitals could not afford to pay it, Lewis added.

The proposed levy on health insurance plans also sparked opposition. That tax would have been passed on to consumers and businesses in increased insurance costs, said David Raynor, state director of the National Federation of Independent Business.

Meanwhile, the need for hospital trauma funding has spawned a variety of bills and resolutions in the General Assembly.

Georgia has only 15 hospitals that specialize in trauma care, and many lose millions of dollars providing the costly service. Advocates have called for the state to provide $75 million annually. Last year, the state gave one-time funding of $58 million, which was divided among trauma hospitals.

Extra funding could help many accident victims across Georgia. An estimated 700 people die annually due to the state’s sparse trauma coverage.

Lt. Gov. Casey Cagle said Friday that the state should build the network first. He points to a proposal to require hospitals with an emergency room to provide minimum trauma services.

Several legislators call for a permanent source of trauma funding. “These hospitals are not going into the network on the basis of one-time funding,” said Sen. Cecil Staton (R-Macon), a leading proponent of an enhanced trauma system.

A House bill would require a trauma charge of $10 per year on each passenger vehicle licensed and registered in Georgia. Sen. Greg Goggans (R-Douglas) has pushed a resolution creating a constitutional amendment for voters to approve a similar fee. “I’m hoping to use some stimulus dollars to shore up existing trauma [hospitals],” he added.

Ideas for long-term funding include a fine on “superspeeders,” pushed by Perdue; a fee on telephone subscribers; and a dedicated amount of the state property tax for trauma care.

Trauma hospitals such as Atlanta’s Grady Memorial Hospital, which loses $40 million a year on the service, hope for sustainable funding.

“It is vital for us,” said Grady Health System lobbyist Tish Towns. “It’s something that’s needed [across] the state.”