Hospitals won't oppose tax renewal

By Bobby Harrison/NEMS Daily Journal

JACKSON – Mississippi’s hospitals are not expected to oppose renewing about $200 million in taxes they pay to pull down federal Medicaid funds.
The tax is scheduled to expire this summer, and new Gov. Phil Bryant, who spoke to the Hospital Association Tuesday in Jackson, said he favors renewing it. When the tax was enacted in 2009, it was controversial and threatened to prevent the Legislature from agreeing on a budget to fund Medicaid as the issue was debated.
Sam Cameron, chief executive officer of the Hospital Association, said his group would not oppose that renewal as long as it was not changed. At one point, the Hospital Association argued its members should not pay the tax, but instead the money to draw down the federal Medicaid funds should come from the state general fund revenue since it was of benefit to the entire Medicaid budget.
During the 2009 session, the state budgeting process was shut down until the final day of the fiscal year as then-Gov. Haley Barbour and the Hospital Association argued about who should pay the tax.
On Tuesday, Cameron conceded the “the state cannot afford” to pay the tax through the general fund.
Bryant did not mention the tax in his speech to the Hospital Association. But before his speech, he said he favors renewing the tax.
“I have talked to the Hospital Association,” he said. “My point is if we do not renew it … we will have to find out where the revenue comes from.”
The tax is levied on non-Medicaid inpatient days. Cameron said the tax has put a burden on some of the state’s hospitals.
But for paying the tax, he said the hospitals received assurance in law in 2009 that the Medicaid payments they receive would not be reduced if the state was forced to make budget cuts because of a revenue shortfall. He said the hospitals would want that protection continued if the tax is renewed.
The hospital tax revenue is used to pull down federal Medicaid money at a 3-to-1 match. So, the tax of about $200 million generates much more than one-half billion dollars for the state Medicaid program, Cameron said.
Medicaid is a federal-state program that provides health care for the elderly, disabled and poor pregnant women and poor children.
bobby.harrison@journalinc.com