Bed tax spurs battle over Medicaid funding

1.45% bed tax was designed to even the financial playing field among Georgia hospitals
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A battle over a "bed tax" levied to all healthcare systems in Georgia raises the question of whether hospitals that don't treat a large portion of Medicaid patients should help pay the costs of hospitals that do, The Atlanta Journal-Constitution reported.

Medicaid patients at Piedmont Healthcare account for less than 3 percent of patient volume, while Children's Healthcare of Atlanta has more than 55 percent of its patients on Medicaid. Therefore, the fee paid to bolster the state's Medicaid program means millions of lost dollars for Piedmont and millions in revenue for Children's.

Hospitals agreed to the 1.45 percent bed tax in 2010, but the fee goes up for renewal in June. Hospitals that largely depend on Medicaid funding support the bed tax, and those with small Medicaid populations are either neutral or oppose it, The Marietta Daily Journal reported last month.

That would put Grady Memorial Hospital and DeKalb Medical Center as supporters, while St. Joseph's, Emory University Hospital and Northside Hospital would go against the fee, according to the Journal-Constitution.

The bed tax was designed to even the financial playing field among Georgia hospitals, but not everyone agrees. "It polarizes the industry and creates the perception that more successful hospitals are subsidizing less successful ones," Piedmont spokesman Matt Gove told the Journal-Constitution.

Children's Healthcare Vice President of Government Relations David Tatum offered his "simple answer" for hospitals that say they are losing millions from the bed tax: "You should do more Medicaid," he told the newspaper.

The Georgia Hospital Association is developing a plan that will keep the bed tax and also ease the concerns of hospitals that lose money on the fee, the article noted.

Last year, Arizona hospitals said they were open to paying a $300 million bed tax to avoid giant Medicaid cuts.

For more:
- here's the Journal-Constitution article
- read the Daily Journal article

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