Deal to propose ‘bed tax’ fix on session’s first day

Gov. Nathan Deal believes he has found a possible solution to one of this year’s thorniest legislative issues: How to keep hospitals that rely on Medicaid solvent while allowing legislators to avoid voting on what some see as a tax increase, The Atlanta Journal-Constitution has learned.

Deal’s floor leaders in the House and Senate introduced legislation Monday that switches the responsibility for levying the fee from the legislature to the Department of Community Health. The move to levy a provider fee would replace the so-called bed tax on hospitals.

A senior official in Deal’s administration told the AJC on Sunday the move could head off a messy fight over whether to renew the bed tax. The levy is seen as a necessity to avoid massive reductions in Medicaid reimbursements to doctors and to fill a more than $500 million void in the state Medicaid budget.

Top lawmakers Sunday expressed optimism about the plan while stressing they had not yet seen it.

The governor’s employee, who was not authorized to speak on the record, said the proposal mirrors what the Department of Community Health already does with nursing homes.

“The nursing home provider fee is already at the DCH board,” the official said. “The Legislature already gave DCH the power to vote to or vote not to levy the provider fee. This mirrors that.”

The Legislature and the governor would have to re-authorize the move every five years.

The fee, known as the bed tax by some, is set to expire this year. It allows the state draw more than $500 million in federal matching funds to prop up Medicaid, the health care program for the poor. After months of heated negotiations, hospitals had already agreed to a fee extension with some tweaks.

The official in the governor’s office said the hospitals support Deal’s plan. Efforts to reach Georgia Hospital Association leaders were unsuccessful Sunday night.

Advocates say letting the fee expire in June could limit access to critical medical care for thousands of Georgians if some hospitals are forced to cut services and others, especially in rural Georgia, close.

Opponents have included national anti-tax activist Grover Norquist, who last year urged legislators here to vote against extending the fee.

House Speaker David Ralston, R-Blue Ridge, attending the annual Wild Hog Supper that is the traditional kick-off to the legislative session, said he has yet to see the bill. But, he said, it “would be a very reasonable solution,” especially since the DCH board already oversees the provider fee for nursing homes.

Ralston said he has some concern that it would mean the Legislature is abdicating its authority, but believes that concern can be remedied in the bill by including oversight.

Sen. David Shafer, R-Duluth, who is likely to be elected to the Senate’s top position today, said he, too, had not seen the bill.

“Clearly this is an issue that has to be addressed,” Shafer, the Senate president-pro tem elect, said. “I would want to read the legislation before I comment.”

Democrats are more circumspect.

House Minority Leader Stacey Abrams, D-Atlanta, said renewing the fee does nothing to solve the larger problem of Medicaid. It would still face a funding shortfall, she said. She supports expanding Medicaid through the federal health care law known as Obamacare.

Her counterpart in the Senate, Steve Henson of Tucker, said the idea deserves debate as part of a larger discussion of the state budget to “see if that’s the best way to raise revenue” for Medicaid.