A state House of Representatives committee on Tuesday approved a plan by Gov. Nathan Deal that would extend a controversial fee on hospitals that brings in hundreds of millions of dollars to prop up the state’s ailing Medicaid program.
Deal has urged lawmakers to fast-track passage of Senate Bill 24 that would give the state’s community health agency power to levy the 2-year-old fee, commonly called the “bed tax,” to help fill a nearly $700 million budget hole in Medicaid.
Not passing the bill, supporters say, would limit access to critical care for thousands of Georgians. Anti-tax activists see the fee as tantamount to a tax increase, but even lawmakers who loathe extending or creating taxes say ending the fee would deal a devastating blow to Georgia’s health care system.
Without it, hospitals could face Medicaid reimbursement cuts of 20 percent or more.
In his State of the State speech this month, Deal said up to 15 hospitals, especially in rural Georgia, could face closure. Officials at Grady Memorial Hospital in downtown Atlanta and other safety net hospitals across the state have also warned they would likely be forced to significantly cut services.
“Our hospitals have said they don’t really like it, but they understand it,” said Mark Hamilton, R-Cumming, a member of the House Governmental Affairs Committee.
Letting the fee expire would not only mean the threat of closure for hospitals, but it would also be a huge financial hit to rural communities where hospitals are the main economic engine, said Jimmy Lewis, CEO of HomeTown Health, a network of rural hospitals and providers.
“It’s a catastrophic situation,” Lewis said.
Lawmakers originally passed the controversial fee in 2010 to help support Medicaid, which provides health care to roughly 1.7 million low-income Georgians. The fee is set to expire this year.
The health care program has faced massive deficits in recent years as enrollment increased amid a tough economy, a financial challenge state officials only expect to get worse.
Deal said this month that the Affordable Care Act is estimated to add more than 100,000 people to Georgia’s Medicaid rolls at a cost to the state of $1.7 billion over 10 years.
Giving the state Department of Community Health authority over the fee will allow the state more flexibility to react more quickly to decisions made by the federal government, said state Rep. Matt Hatchett, R-Dublin. The department already oversees a similar fee on nursing homes.
Committee members said SB 24 could possibly head to the House floor for a full vote as early as this week. House Speaker David Ralston, R-Blue Ridge, has endorsed the bill.
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