Posted on March - 29 - 2010
Ritz says proposed ‘bed tax’ isn’t Med lifeline
A new fee on Tennessee hospitals may not be enough to get the Regional Medical Center at Memphis out of the financial woods this year, according to Shelby County Commissioner Mike Ritz.
The Tennessee Hospital Association-backed hospital coverage fee, which has been known in the past as a “bed tax” and an “enhanced coverage fee,” was introduced in the Tennessee General Assembly Thursday.
The hospital advocacy and lobby group said the 3.5 percent fee on certain hospitals’ net revenues will raise around $225 million. This figure becomes $659 million after federal funding matches, according to THA figures.
In a Med task force meeting Thursday, Ritz noted that Gov. Phil Bredesen’s proposed budget cuts $1.2 billion from TennCare.
“If you listen very carefully here, $659 million is not $1.2 billion,” Ritz said. “The people I have met with … are not believing that The Med and (Nashville General Hospital) can survive that kind of cut.”
The cut would leave TennCare with a $541 million budget gap for the year, which would mean lower revenues for Tennessee hospitals and for The Med, which sees a large amount of TennCare patients.
Med board chairman Gene Holcomb said the numbers he was given by local hospital leaders originally showed that the fee would raise $400 million in state funds. Those funds would have totaled $1.2 billion after federal matches and totally bridged the TennCare funding gap. He noted, though, that the original numbers were likely not fine-tuned at the time.
However, he said he was interested to hear THA’s response as to what happened to the original plan.
The governor’s proposed budget cuts would produce a $50 million shortfall for The Med this year and create a “game over” situation as Med officials have said in the past.
“Clearly (The Med) could not stand to take a 50 percent hit on $50 million,” Holcomb told the task force.
Med CEO and THA member Dr. Reginald Coopwood said the new THA proposal recognizes cuts that only directly affected hospitals.
“There were other (TennCare) cuts proposed that don’t directly affect hospitals,” said Tish Towns, a Med vice president. “So, the coverage won’t pick that up.”
The hospital coverage fee is slated to be heard in a committee next week.
TennCare officials said Thursday that they will be able to use a federal refund of $121 million to postpone some cuts to the state’s expanded Medicaid program for a year.
Last month, the Centers for Medicare and Medicaid Services said the state can keep some of the reimbursements it makes to the federal government to pay for prescription drug benefits.
The funds will be used to postpone limitations on non-emergency outpatient visits, physician procedures and the implementation of a $2 co-pay on non-emergency transportation, among other things.
– Toby Sells: 529-2742
Hospital coverage fee
What it does: Lets Tennessee hospitals temporarily “step into the state’s shoes” to fund part of TennCare next fiscal year
Limits: Tennessee Hospital Association says fee would not be passed on to patients
Exempt: The Med and St. Jude Children’s Research Hospital would not have to pay the fee
Contact: (615) 256-8240
Web site: tha.com
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