Senate passes ‘provider fee’ to close Georgia’s Medicaid funding gap

Gov. Nathan Deal's push to renew a fee on Georgia hospitals to help close a more than $900 million gap in Medicaid funding took a step forward Wednesday, when the state Senate passed legislation to extend the fee another three years.

Senate Bill 70, sponsored by state Sen. Butch Miller, R-Gainesville, would reauthorize collection of what's officially known as a hospital provider fee until 2020. It passed on a 50-3 vote, after the body easily defeated an effort to shorten the extension to only one year.

Deal last month exhorted lawmakers to keep the fee, which was instituted in 2010 and subsequently renewed in 2013 despite some lawmakers' complaints about it being a "bed tax." It is administered by the board of the state Department of Community Health.

The fee is a key funding source for the state’s Medicaid program. Based on a percentage of patient revenue, the hospital fee raises about $311 million annually and allows the state draw down an additional $600 million in federal money to help fund Medicaid and support hospitals that provide care to large numbers of uninsured patients.