It was just the second day of the legislative session, but a state Capitol meeting room was packed with health care officials and lobbyists Tuesday. Besides those with seats, there were people standing against every available wall or massed at the door.
Just as unusual as the early timing and the heavy attention was the venue of the meeting. The Senate Regulated Industries and Utilities Committee is not the typical panel to hear a major health care bill. In fact, health care veterans said they couldn’t recall any such bill ever being considered by the committee before.
Senators on the panel met Tuesday to weigh legislation that would shift authority to levy the state’s Medicaid hospital provider fee from the Legislature to the Department of Community Health.
“We’re getting started with a bang,’’ said Sen. Jack Murphy (R-Cumming), chairman of the Regulated Industries panel, at the beginning of the hearing.
The committee heard a presentation of Senate Bill 24’s provisions. And after approving some minor amendments, the members passed the bill 11-3. It now goes to the full Senate, perhaps as early as Thursday.
A similar House bill is expected to get off to a fast start as well.
The speed behind the legislation attests to the support and yearlong groundwork laid by hospital industry officials, and to the recent endorsement of the strategy by Gov. Nathan Deal and leading Republican lawmakers.
The provider fee generates more than $400 million for the Medicaid program, and lawmakers and Deal appear to want this financial hole filled quickly so they can tackle the rest of the state budget.
A deft maneuver
Moving the assessment of the provider fee to the state Medicaid agency is expected to avert the problem of anti-tax Republican legislators having to vote on the fee itself.
Critics call the fee a “bed tax,’’ and national anti-tax leader Grover Norquist had urged Georgia legislators to take a stand against the fee and vote it down altogether.
But many Georgia politicians don’t see getting rid of the fee as realistic. The state’s Medicaid program already faces a $400 million shortfall, and major payment cuts to hospitals are expected if the fee goes out of existence. The current version ends in July.
Virginia Galloway, state director of Americans for Prosperity, told the AJC that the proposed transfer to Community Health is a “cowardly move by our elected legislators to double-kick the can across the road to an unelected bureaucracy, and down the road to add to our federal spending and debt problem.”
Currently, the fee is not levied on individual patients or on hospital beds, but is based on a hospital’s net patient revenue. Individual hospitals get different amounts based on how much Medicaid business they do, and some hospitals have complained of being shortchanged by the current formula.
The lead sponsor of the bill, Sen. Charlie Bethel (R-Dalton), pointed out to the committee Tuesday that Community Health already performs the same assessment function with a nursing home industry fee, which also generates matching federal dollars.
He and other backers emphasized that the Legislature has ultimate authority over spending of the funds raised by the fee.
Parties at odds
Democrats on the committee raised a procedural question, suggesting that the legislation was introduced improperly.
Sen. David Lucas (D-Macon) asked whether it is a revenue bill, which would require that it originate in the House, not the Senate.
Steve Henson (D-Tucker) took the same line, saying, “The clear intent is to raise revenue.’’
Bethel countered that the measure is an “authority bill.’’
“If we were assessing a fee directly, it would be a revenue bill,’’ he said.
Henson also noted the proposal to renew the Medicaid assessment has changed recently; it had been originally conceived as a more straightforward voting proposal.
Henson ultimately voted “no,’’ as did Lucas and Sen. Joshua McKoon (R-Columbus).
Before the vote, hospital industry officials voiced their support of the bill.
David Tatum, a Children’s Healthcare of Atlanta vice president, said not having a provider fee would likely mean a 20 percent cut in hospital reimbursements from Medicaid.
Jimmy Lewis, CEO of HomeTown Health, said such cuts could force the closure of more than 20 rural hospitals, which he said are already ‘‘under severe duress’’ financially.
Grady Memorial Hospital lobbyist Matthew Hicks said the fee meant $10 million to the facility’s bottom line last year. And Julie Windom, a vice president of the Georgia Alliance of Community Hospitals, said retaining these funds preserves access to care for “Georgia’s most vulnerable citizens.’’
David Shafer (R-Duluth), the Senate’s president pro temp, emphasized that the General Assembly still has the power to override the assessment. He offered amendments, including one to have the measure ‘‘sunset’’ (expire automatically) in 2017, not 2018 as originally proposed.
After the hearing, McKoon told GHN that he had pledged to voters that he would read and understand any legislation before approving it.
McKoon said he felt obligated to vote ‘‘no’’ because he had less than an hour to read the revised bill before the hearing. That vote doesn’t mean he will not end up supporting the bill, he said.
Sen. Renee Unterman (R-Buford), who chairs the Senate Health and Human Services Committee, cited the impact on rural Georgia if the state did not have a Medicaid hospital fee.
Passing the legislation, she said, ‘‘is crucial for the health care infrastructure of the state of Georgia.’’