The first step on the road to wisdom, Confucius declared thousands of years ago, is to call a thing by its proper name.
Republicans in Washington have taken the Chinese philosopher’s advice to heart, and are now engaged in a debate over whether an increase in federal revenue can correctly be labeled a tax hike. Anti-tax guru Grover Norquist says yes. U.S. Sen. Saxby Chambliss says no.
A Georgia version of this name game – no less intense than the one in D.C. — is already percolating. Two-and-a-half years ago, the state Legislature passed what came to be known as “the bed tax” – a levy on Georgia’s hospitals used to leverage federal dollars and prop up the state’s Medicaid program.
It expires next year. Gov. Nathan Deal, House Speaker David Ralston and soon-to-be Senate president pro tem David Shafer all agree that without it, there will be hell to pay.
But a bed tax? They’ve never heard of it. “Medicaid assessment fee,” says Ralston. “Provider fee,” the governor told a reporter. “The financing plan,” texted Shafer. Because if it is indeed a tax, then few Republicans will touch it and one of next year’s most important legislative battles will be over before it’s begun.
Briefly, here’s how it works: Hospitals pay a 1.45 percent fee, levy, mandatory donation or tax – take your pick – on net patient revenue. Slightly less if the hospital also provides trauma care. Last year, the state used the collected $215 million to draw down an additional $590 million in federal Medicaid funds that are used to provide health care for the state’s poor.
Money collected from the hospitals is returned according to how much Medicaid service they provide. So hospitals with low rates of lower-income patients lose out.
Without the fee/tax, Medicaid payouts would shrink to the point that many hospitals, particularly in rural Georgia, would have to close, advocates say.
Lawmakers will assemble in January to formally debate the issue. “Without it, we’re going to be hard-pressed to maintain the quality of care and to provide the payments to the provider community that we’d like to see,” Deal said recently. The governor said extension of the Medicaid provider fee “seems like the most logical” alternative.
“If we do not renew the financing plan, our only options are to divert general funds to Medicaid or substantially reduce reimbursements to medical providers,” said Shafer, the future leader of the Senate. “There is no easy choice.”
Said Ralston last week: “I’m not sure that doing nothing is an option.”
Lobbying is already underway, and has taken a particularly ruthless form. In late October, tea party activists Debbie Dooley and Julianne Thompson, were invited to a tour of Children’s Healthcare of Atlanta at Egleston – CHOA has been the largest Medicaid provider in the state for the last five years.
A bird’s-eye explanation of why the Medicaid funds were needed included the hospital’s heart-breaking neo-natal unit, where early-arriving, unfinished babies are nursed into full-sized miracles.
The tea party pair said they weren’t swayed by the sight. “We’ve been around the block several times. So we knew going in that they had a motive,” Dooley said.
“Most of our activists are currently opposed to the bed tax, but we’re still getting more information,” said Thompson.
David Tatum, vice president of governmental affairs for Children’s Healthcare, said he’s conducted 22 such tours since June – for state lawmakers, their staff, and tea party leaders. The neo-natal unit has been getting a workout.
“It’s impactful,” Tatum admitted.
Republican leaders in the Capitol have pressed hospitals to come to an agreement on an extension of what Tatum personally likes to call “the Medicaid finance program.”
Many hammers exist to encourage them. Last week, Ralston raised the possibility that the Legislature might review the non-profit status claimed by many hospitals – and raise Medicaid matching funds that way.
But the biggest hurdle for an extension of the Medicaid program/fee/assessment/tax is the fact that the Legislature is far more conservative than it was in the spring of 2010. Tatum figures that 70 of 236 state lawmakers will be new to the debate. Forty-three were elected just last month.
Most of the newbies are Republicans who consider themselves part of the tea party revolt. They include state Sen. Josh McKoon, R-Columbus, who was elected in 2010 – after the Medicaid levy on hospitals was already in place.
He will oppose the extension of what he considers a tax. “I oppose the bed tax for the same reason I support the governor on his decision to refuse the Medicaid expansion,” McKoon said. Both would rely on additional – and borrowed – federal funds, he said.
McKoon said he is ready to fill a $300 million to $400 million gap that will result by cutting an already vastly trimmed state budget. “As I understand it, there was a very clear and public assertion that this was going to be a temporary measure,” the Columbus senator said.
Keeping that promise is as important as getting the name right, he said.
- By Jim Galloway, Political Insider