Lawmakers cut deal that gives hospitals ‘veto' over bills

By Aaron Gould Sheinin

The Atlanta Journal-Constitution

As part of an agreement struck between lawmakers and the state's hospitals for the medical centers to accept a new tax on patient revenue for the next three years, lawmakers have agreed to protect hospitals from "bills harmful to hospitals" for three years, according to a copy of a memo obtained by The Atlanta Journal-Constitution.

The memo, drawn up by the Georgia Hospital Association, the Georgia Alliance of Community Hospitals and Hometown Health -- which collectively represent every hospital in the state -- was agreed to by leadership in the House and Senate, a hospital association official confirmed. While the agreement is nonbinding under the law, it shows the power of the hospitals and the importance lawmakers placed in getting hospitals' buy-in for the plan to raise more than $175 million to help fund Medicaid.

Earl Rogers, senior vice president for the Georgia Hospital Association, said the hospitals have carved out an agreement with House and Senate leadership.

"We have an agreement with them that they will do everything they can to help us," Rogers said. "We've asked them for a little breathing room while we're under this payment."

Rogers said the hospitals are concerned about taking on the extra 1.45 percent fee (which some call a tax) while also navigating the unknown impact of the federal health care overhaul approved this week in Washington.

The House Appropriations Committee approved the fee Tuesday, ending months of negotiations involving Gov. Sonny Perdue, lawmakers and the hospitals. Perdue at one point suggested tougher measures, including revoking a sales tax exemption for purchases by nonprofit hospitals and making deep cuts in Medicaid provider payments.

The hospitals realized the fee was the best of a poor set of options.

But that hasn't stopped them from pursuing further breaks in the bill. The hospitals want their 1.45 percent tax payments to apply to state requirements that they provide free indigent care in an amount equal to a certain percentage of their annual revenue. That proposal was also included in the hospitals' memo, although it appears as if that portion, at least, has not yet been agreed to by lawmakers.

"I don't have a lot to say about that," Rogers said. "We're still working on that."

Meanwhile, private doctors are steamed that they were left out of the negotiations. They are also subject to the 1.45 percent tax but get none of the benefits through the increased Medicaid reimbursements promised to the hospitals, said Kathy Browning, executive director of the Georgia Society of the American College of Surgeons.

Many of Browning's members own what are known as ambulatory surgery centers, which are private clinics not affiliated with a particular hospital. Those doctors, she said, are "included in the bed tax without the physicians being included in the negotiations or brought to the table."

They oppose the bill, HB 307. "The legislation is pretty open, and that's what we were told: The intent was that the doctors would not get the increase in Medicaid reimbursement," Browning said. "The physicians won't see that. Although it's hard to tell you what the intent was because doctors were not allowed at the table."

Marshall Guest, spokesman for House Speaker David Ralston (R-Blue Ridge) said the speaker has heard concerns form some House members and is discussing the situation with them.

"The speaker believes House leadership relied on good-faith representations from the hospital community when they reached this agreement," Guest said.

As for the three-year moratorium on legislation "harmful" to hospitals, Guest said "this is an agreement made in principle, but one Legislature can't bind a future body."

That means lawmakers today can't require future lawmakers to do anything, and next year's General Assembly could decide to adopt legislation the hospitals might not like.

Senate leadership declined to comment on the memo or the negotiations with the hospitals.

Rep. Jim Cole (R-Forsyth), who sponsored the bill as Perdue's floor leader, said he and the governor were involved only in the broad outlines of the negotiations, not the specifics of any agreement.

Perdue spokesman Bert Brantley said much the same thing.

"We were not involved in the back and forth negotiations," he said. "The governor made it clear where he was. We were not directly involved in negotiating it at all."

Whomever was involved should have to face the public, said House Minority Leader DuBose Porter (D-Dublin).

"Hospitals are getting a sweetheart deal with veto power over all health care legislation for three years," said Porter, who is running for the Democratic nomination for governor. "Consumers, patients and doctors, people who actually matter, were left out entirely. It's one of the most unethical and scandalous things I've seen."