After realizing that a one dollar tobacco tax will not make it through the legislature this year, hospitals are warming up to the idea of paying a 1.6 % provider fee.
That’s because they want to avoid lower Medicaid payments.
To fill a Medicaid budget hole, Governor Perdue proposed the provider fee in his first budget outline. Otherwise, he says hospitals would take a 10.25 % cut in medicaid re-imbursements.
Hospitals immediately balked at the idea saying it would be too much of a burden. They lobbied instead for a dollar tobacco tax.
But when Republican leaders refused to support that idea, hospitals started negotiating.
Jimmy Lewis lobbies for a group of rural hospitals.
“The ball is moving to the provider tax. There are major hurdles to overcome to get to that, it’s a major turn on our part, but it’s the least offensive of the option that are on the table.”
Hospitals want the fee to sunset in 2 years and they’re looking for exemption of some non-profit and state run hospitals.
The provider fee would allows the state to access federal matching grants for Medicaid.