Tennessee: Hospitals seek 3.5 percent fee to forestall TennCare cuts

Tennessee: Hospitals seek 3.5 percent fee to forestall TennCare cuts

March 4th, 2010 by Andy Sher in Local Regional News

The Tennessee Hospital Association today unveiled a proposed 3.5 percent "enhanced coverage fee" on most hospitals in an effort to raise $229.5 million in a bid to offset many of the TennCare cuts made or planned by Gov. Phil Bredesen.

Association officials began briefing top Republican legislative leaders on the fleshed-out proposal this morning and were to hold meetings later today with Democratic lawmakers and Bredesen administration officials.

Lt. Gov. Ron Ramsey, R-Blountville, was non-committal, calling it "an interesting proposal. We'll just have to work our way through it and see how things work out."

The fee would be applied to a hospital's net patient revenues as defined by federal Medicare rules. It would last for one year but could be renewed. Proposed legislation would restrict it solely to specified uses in TennCare, and the money would be held in a segregated fund. The fee would go into effect only if approved by the federal Centers for Medicare and Medicaid Services.

Officials said the centers has approved similar fee or tax programs for 25 other states' Medicaid programs. TennCare is Tennessee's version of Medicaid, covering an estimated 1.25 million people.

The $229.5 million would replace state TennCare funds for many of the hospital programs that were cut last year or would be cut under the proposed 2010-2011 state budget. For roughly each 34 cents that Tennessee spends on TennCare, it gets about 66 cents in federal matching funds. The plan would raised an estimated $429.6 million in federal matching funds, providing some $659.2 million into TennCare.

For complete details, see tomorrow's Chattanooga Times Free Press.