State extends, expands hospital bed tax

California Gov. Jerry Brown has signed into law an extension of the hospital bed tax in California that helps to draw down hundreds of millions of dollars in matching funds each year from the Medicaid program, California HealthLine reported.

The fee, which was extended for three years, also got expanded significantly. The prior version of the fee drew down $4.6 billion in matching funds over the past three years. This extended fee would draw down more than $10.5 billion in matching funds between January 2014 and mid-2016.

"This is a huge win, getting that bill signed was our top legislative priority," Jan Emerson-Shea, a spokesperson for the California Hospital Association, which sponsored the legislation, told California HealthLine.

Self-imposed hospital "bed taxes" have become increasingly popular in states as a mechanism for leveraging additional funds from the Medicaid program. One such tax created controversy among hospitals in Georgia, some of which claimed it provides an unfair advantage to hospitals that have larger Medicaid caseloads, FierceHealthcare previously reported.

The California bill signed by Brown reversed a pending 10 percent cut in Medicaid funding to more than 100 nursing homes statewide that are operated by hospitals.

To learn more:
- read the California HealthLine article

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