Without bed tax, Medicaid funds out of reach for rural Texas hospitals

A Texas state senator trying to help hospitals in his lower Rio Grande Valley district match federal Medicaid funds to cover indigent care has introduced legislation that would impose a bed tax, or uncompensated care fee, on hospitals.

State Sen. Juan "Chuy" Hinojosa ( D-McAllen) filed two bills, according to The Monitor. One imposes a statewide fee, while the other applies only to hospitals in counties bordering Mexico.

Rio Grande Valley was unable to come up with the $300 million-plus in local funds needed to capture $802 million in federal Medicaid funds for uncompensated care over a five-year period. The bills are an attempt to allow hospitals to raise money by essentially taxing themselves, the article noted.

Hinojosa told the Monitor that hospitals in the state's urban areas raise money through property taxes raised by hospital districts, but the mostly rural Rio Grande Valley doesn't have that option.

Bed taxes appear to be growing in popularity, with Utah and Georgia among states imposing such fees.

Meanwhile, in New Hampshire, an independent study finds that hospitals and other providers will gain revenue from 2014 to 2020 under the Affordable Care Act compared with pre-ACA estimates. But the amounts vary: $3.5 billion if Medicaid expands, and $3.3 billion if there's no expansion. The primary savings come from reducing the number of uninsured patients.

Physicians, clinics and pharmacies will see greater gains under Medicaid expansion, while hospitals will gain comparatively less, according to the report from The Lewin Group study, financed by the Health Strategies of New Hampshire.

Expanding Medicaid also offsets other costs to state-funded programs, such as the state high-risk insurance pool. Under expansion, the savings would total $67.1 million, only slightly above the $65.8 million in savings from healthcare reform without a Medicaid expansion.

If the state expands Medicaid under a managed-care program with premiums, the savings are $116.6 million from 2014 to 2020, according to the study.

To learn more:
- read the Monitor article
- download the N.H. study (.pdf)