Governor may back hospital fee plan

NASHVILLE -- The Bredesen administration is looking favorably on a Tennessee Hospital Association proposal to offset deep TennCare cuts through a one-year "enhanced fee assessment" on hospitals that would raise $200 million, a top official said Tuesday.

"Generally, I think we're supportive of the notion," Deputy Gov. John Morgan said, but he noted administration officials first "want to see details."

The Tennessee Hospital Association's board voted unanimously on Monday in favor of having the General Assembly approve the proposal. The association wants to use the $200 million to draw down an estimated $400 million in federal Medicaid matching funds for TennCare, which is Tennessee's version of Medicaid.

Hospitals otherwise face combined cuts of $540 million that take effect in the proposed 2010-11 budget.

If the latest cuts go through, TennCare itself will have seen total state and federal cuts of $1.5 billion during the 2008-09, 2009-10 and 2010-11 budgets, according to state figures.

"It appears that the bill may be necessary to help keep our hospitals solvent, because it draws down some federal funds," said House Democratic Caucus Chairman Mike Turner of Nashville. "They (hospitals) have assured us that they will not pass on any of that cost to the consumer or the patients at the hospital. If that's the case we may need to do it. But all the details are not in."

Lt. Gov. Ron Ramsey, R-Blountville, the Senate speaker who is running for governor, told the Associated Press on Monday that it is "way too early to decide whether we want to do that or not."

But Deputy Gov. Morgan said that is "something we're perfectly willing to explore and be supportive of if we can," noting the state has for years garnered additional funding through a fee on nursing homes.

Democratic Gov. Phil Bredesen has said he needs to cut an additional $201 million in state dollars from TennCare to balance his proposed $28.41 billion state budget for 2010-2011. The TennCare reduction is part of $394 million in state cuts.