California's hospitals consider ballot initiative against Medicaid tax siphoning

California's hospitals were among the first in the nation to levy a tax upon themselves in order to leverage more payments from the Medicaid program. Now, the acute care providers in the Golden State are scrambling to preserve those extra payments.

The California Hospital Association has floated a ballot initiative that would prohibit state regulators from imposing the tax levy unless the Medicaid dollars flow directly to the hospitals, the Sacramento Business Journal reported.

According to the Business Journal, the state's hospitals had agreed to the state taking a small amount of the Medicaid dollars to pay for children's healthcare delivery. However, the state in recent years has diverted more funds to cover other holes in its budget. Scripps Howard News Service reports that approximately 20 percent of the money--about $600 million annually--is being diverted away from hospitals. Additionally, hospitals are losing the matching payment from Medicaid.

"For more than two decades, California has not appropriated the monies necessary to draw down the full amount of available federal matching funds for Medi-Cal payments to hospitals," CHA president and CEO Duane Dauner said in a statement. "As a result, California has left billions of dollars in available federal funds on the table in Washington, D.C., and significantly underpaid hospitals that provide life-saving care to Medi-Cal patients."

The CHA would need about 800,000 signatures from registered voters to qualify the initiative for the November 2014 ballot. The association will assess its membership a total of $48 million to fund the initiative process, the Business Journal reported.

To learn more:
- read the Sacramento Business Journal article
- check out the Scripps Howard article
- here's the California Hospital Association statement

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