Proposed hospital fee clears major House hurdle

NASHVILLE -- In a General Assembly where partisan battles can erupt at the drop of a hat, a proposed 3.52 percent fee on hospitals whisked through the House Finance Committee Tuesday on a bipartisan voice vote.

The bill, which would raise an estimated $310 million, is largely intended to offset proposed TennCare cuts.

The committee, which had heard testimony last week on the bill, approved the measure without debate, sending it on to the House Calendar and Rules Committee.

House Health and Resources Committee Chairman Joe Armstrong, D-Knoxville, the House bill's sponsor, told Finance Committee members that the bill is "allowing hospitals to take the place of the state" on some of the state's share of funding TennCare.

"They (hospitals) are proposing a 3.52 percent fee on their net revenues," he said. "A lot of hospitals will not pay this. This allows us (state) to draw down federal matching dollars."

The federal government provides about 66 cents for each 33 cents the state puts into TennCare, the state's version of Medicaid.

About $220 million of the money raised from the fee would go into TennCare and, when combined with federal matching funds, would restore about $659 million in pending and proposed cuts to TennCare that are slated to begin July 1.

Those cuts include a proposed $10,000 annual cap on state reimbursements to hospitals for adult TennCare enrollee's hospital stays. Hospitals are expected to eat the losses.

Rep. Armstrong warned colleagues that they need to pass the law by next week because federal law requires the state warn an estimated one million TennCare enrollees about the pending cuts. The deadline is next week, he said.

The Senate version of the bill is scheduled to come up for a final floor vote on Thursday.

The Tennessee Hospital Association proposed the fee plan, saying Gov. Phil Bredesen's proposed TennCare cuts would wreak havoc on hospitals. Association officials have pledged their members will not raise charges on patients.

"Today's unanimous vote in the House Finance Committee was another big step in restoring $659 million in proposed TennCare cuts," Hospital Association President Craig Becker said. "We are optimistic that the legislation will receive the same positive response by the full Senate on Thursday and the full House next week."

He thanked lawmakers for working "to pass this crucial legislation and saving Tennessee's hospitals, their patients, TennCare enrollees and every community in this state from devastating cuts."

House Majority Leader Jason Mumpower, R-Bristol, later predicted the bill will pass the House "overwhelmingly."

"I appreciate the hospitals for participating in the program," he said, and that it will "go a long way toward relieving" state budget woes.

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Article: Tennessee: House committee approves hospital fee