Nonprofit Newswire | A Hand of Political Poker—Hospitals and the State of Georgia

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March 23, 2010; Atlanta Journal-Constitution | An agreement was reached yesterday between hospitals and the State of Georgia regarding a fee or “bed tax” that will be imposed on hospitals. The fee amounts to 1.45% of all patient revenues. The money that is raised is expected to amount to $225 million of which $50 million will be used to increase the money hospitals are paid for treating Medicaid patients. The remaining $175 million will be used to pay for Medicaid services more generally. This deal, then, will result in a net increase for hospitals that serve a lot of low-income patients and is a tax on the rest. Georgia’s governor Perdue told AJC that he was left with no choice. If the hospitals wouldn’t accept the provider fee, he said, he would push for the state to revoke the sales tax exemption that nonprofit hospitals enjoy for purchases and that he would implement a 10.25 percent cut to the Medicaid reimbursement rates. Once that idea started to gain traction among lawmakers, the hospitals folded. The fee/tax is scheduled to expire in 2013.—Ruth McCambridge