List shows provider tax’s bottom line for hospitals

Print Friendly and PDF By: Andy Miller Published: Jul 24, 2012

The state’s Medicaid agency has released an updated list of  hospital ‘‘winners and losers’’ under the Georgia hospital provider tax.

The hospital levy has helped Georgia raise money for its Medicaid program, which along with PeachCare serves 1.7 million Georgians.

Generally, a hospital pays 1.45 percent of its net patient revenue in tax. The state, at the same time, offsets this expense through an increase of 11.88 percent in hospital Medicaid payments.

In fiscal 2011, the state collected $215 million in fees, which were used to draw down an added $590 million in federal funds, used for paying Medicaid providers, according to the state Department of Community Health.

Hospitals that do a high volume of Medicaid business are the ‘‘winners,’’ coming out ahead under the levy. Those with a low number of Medicaid patients see a negative impact, making them the ‘‘losers.’’

Such taxes are not unusual. More than 40 states have at least one form of a provider tax. And during the recession, some states increased taxes already in place or approved new ones on hospitals, nursing homes or managed care plans.

Georgia’s hospital tax is due to expire next year, and industry experts say it will be a major issue to be sorted out in the 2013 General Assembly session. The Georgia Hospital Association is working on a new way to calculate the tax.

The big winners for fiscal 2011 –- those with a high number of Medicaid patients — include Grady Memorial Hospital and Children’s Healthcare of Atlanta’s two hospitals.

The biggest loser under the formula is Piedmont Hospital in Buckhead. Not surprisingly, Piedmont’s parent organization has been pushing for a revision of the formula.

Here’s a link to the Department of Community Health’s list.

Doing away with the hospital tax is probably not an option. The state’s Medicaid agency has a projected $300 million hole to fill in next year’s budget, Community Health said recently.

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