Extension of hospital provider fee advancing swiftly through House

In a normal year for health care legislation, House Bill 321 would have attracted a ton of attention at the state Capitol.

But with bills to provide a Medicaid waiver and to reform the state’s health care regulatory structure already drawing an intense spotlight, legislation to extend the hospital provider fee passed quietly – and swiftly — in the House Appropriations Committee on Wednesday.


The hospital payment program, which draws extra federal funding, fills nearly a $1 billion hole annually in the state Medicaid budget.

The program is scheduled to “sunset” (expire automatically) next year. The legislation, sponsored by Rep. Jodi Lott (R-Evans), would extend that date to 2025. She told the Appropriations Committee that Gov. Brian Kemp has made “health care access, affordability and quality a priority’’ for his administration.

Lott said failing to renew the program would hurt medical providers and could have “a potentially devastating effect on our state’s Medicaid recipients.’’ Medicaid covers nearly 2 million Georgians.

“This is a critical part of stability for the state,’’ Lott told GHN. She’s a floor leader for Kemp, and she added, “We are diving into health care.’’

The General Assembly is considering a bill to allow Kemp to seek waivers to Medicaid and to the health insurance exchange. Kemp is seeking permission by the federal government to allow the state flexibility in extending health coverage to more people.

Also, the Legislature is tackling a potential overhaul of Georgia’s powerful certificate-of-need (CON) system, which regulates the construction of health care facilities and creation of medical services.

The provider fee drew much more dissent when it was first introduced in 2010.

Critics, including tax activists who sought to block the measure, call it a “bed tax.’’ But in fact, the fee is not levied on individual patients or on hospital beds, but is based on hospital patient revenue.

The state collects about $311 million from hospitals through the fee, and that money is matched with $657 million in federal funds, Lott said.

The funding is then returned to the hospitals through reimbursements. Individual hospitals are reimbursed differing amounts, based on how much Medicaid business they do.

Under the federal rules governing the financing mechanism, hospitals come out as either “winners” or “losers.” The winners net a higher amount than the fee they paid, while the losers get back less than they paid out.

Grady Memorial Hospital

Matt Hicks of Atlanta’s Grady Memorial Hospital, which serves a large number of Medicaid patients, told lawmakers that Grady receives a $13 million benefit from the program annually.

Officials representing Children’s Healthcare of Atlanta and the rural hospital group HomeTown Health also testified in favor of the bill to an Appropriations subcommittee Wednesday.