A Senate committee on Tuesday backed a proposal by Gov. Nathan Deal to allow a state health department to levy “bed tax” hospital fees, fast-tracking the bill to a full Senate vote as soon as Thursday.
The fees, which already exist, shore up Medicaid funds but are set to expire this year. They were first approved in a contentious debate three years ago to fill a hole in the state Medicaid budget of more than $500 million.
Hospitals have said that without the fees, they face massive reductions in Medicaid reimbursements.
Representatives of dozens of hospitals statewide who testified before the Senate Regulated Industries Committee warned that as many as 15 hospitals — especially in rural communities — could close if the fees are discontinued.
“These small hospitals are the economic engine in these rural communities,” said Jimmy Lewis, the CEO of Hometown Health, which represents 55 rural Georgia hospitals.
Fiscally conservative groups have lambasted the plan and said the Legislature would be abdicating its responsibility. No one opposed to the proposal testified Tuesday.
Under the “bed tax,” most Georgia hospitals pay fees of 1.45 percent of net patient revenue. The state uses money raised by the fees to qualify for additional federal funds, which are given to hospitals based on how much Medicaid care they provide.
In other words, the fees pay for hospitals to continue to treat patients who have minimal or no health insurance.
Introduced on Monday in the Senate and House, the proposal would allow the Department of Community Health’s board to levy the fees and penalize hospitals that fail to make payments on time.
Committee members passed the proposal, Senate Bill 24, on a 11-3 vote. They amended the bill to make the fees lapse in June 2017, a year earlier than first proposed. They also mandated that, if the fees are abolished, money left in the fees’ trust fund cannot be spent without the Legislature’s approval.
Resolving the future of the fee early would enable lawmakers to focus on plugging other holes in Georgia’s budget. It’s far from a done deal, though, and industry experts expect the debate to continue over the weeks to come.
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