City mulls hospital tax to fund Medicaid care

Despite Arizona's longstanding objections to expanding its Medicaid program, leaders in its most populous city are considering a hospital tax that would allow it to leverage hundreds of millions of dollars in extra payment, reported the Phoenix Business Journal.

Variants of the proposal, known as the Phoenix Access to Care Ordinance, have been successfully deployed in California and elsewhere. It would allow Phoenix to levy a $130 million tax on hospitals, which could then be used to draw more than $200 million in matching funds from the Centers of Medicare & Medicaid Services, the Arizona Republic reported.

"(It) creates a temporary financial bridge to help hospitals with these extraordinary costs and will ensure we continue to care for patients who are uninsured and underinsured," Banner Good Samaritan Medical Center CEO Larry Volkmar told the Republic.

Hospitals in the Phoenix area absorb about $540 million a year in uncompensated care costs, according to the article. If the tax is implemented, a portion of the money would be used to restore Medicaid coverage to adults, noted the Business Journal.

A proposal to tax hospitals statewide to leverage Medicaid funding died in the state Legislature. However, a law passed last year allowing municipalities to authorize such taxes, the Republic noted.

A public comment period on the ordinance began last week, and the Phoenix City Council will vote on it in early December.

For more information:
- read the Arizona Republic article
- read the Phoenix Business Journal article