The survival of Erlanger at Hutcheson may outweigh anti-tax mood

The survival of Erlanger at Hutcheson may outweigh anti-tax mood

January 9th, 2013 by Tim Omarzu in Local Regional News

Crews recently installed Erlanger at Hutcheson signs at the hospital's campus in Fort Oglethorpe.

Photo by Mike O'Neal

Finances have improved at Erlanger at Hutcheson.

The Fort Oglethorpe public hospital is on track to be $4 million in the black when its fiscal year ends in September, hospital Chief Financial Officer Farrell Hayes said.

"We've actually made money here four out of the last six months," Hayes said.

Since Erlanger Health System took over management of the North Georgia hospital in May, Hutcheson has lured back doctors who had left, brought in new doctors and marketed such services as its baby delivery.

"We're one of the four hospitals around Chattanooga that still delivers babies," Hayes said.

But with about 25 percent of the hospital's patients using Medicaid, Hutcheson officials are worried that the Georgia General Assembly may let the Medicaid provider fee, or "bed tax," expire.

Georgia hospitals pay 1.45 percent of net patient revenue to the state, which uses it to draw matching federal money for indigent health care. The legislature enacted the fee in 2010, and it's set to expire this year.

If it disappears, Georgia's Medicaid system could lose an estimated $430 million annually, because Medicaid would reimburse Georgia hospitals and doctors at a lower rate.

Anti-tax crusader Grover Norquist sent a Sept. 25 letter to Georgia legislators that said extending the fee would be in violation of the Taxpayer Protection Pledge that his Washington, D.C.-based organization, Americans for Tax Reform, had legislators sign.

"[Georgia] health care jobs are set to grow at ... a 38 percent rate, compared to 20 percent for all other industries. A tax hike during such a promising period of expansion in the industry would inhibit job creation," the letter reads in part.

Norquist's take on the Medicaid fee didn't seem to impress two Northwest Georgia legislators.

"Who's Grover Norquist?" asked Rep. John Meadows, R-Calhoun, the head of the powerful Rules Committee.

"I don't sign pledges on taxes or things like that," he said. "First time you do that, you get yourself stuck. Some of the people that signed them, I'm sure they're going to be pressured."

Meadows is optimistic that the legislature will extend the fee.

"Some of the hospitals in rural Georgia won't survive without it, pure and simple," he said.

Roy Orr, the chief executive officer of Murray Medical Center in Chatsworth, Ga. -- which is in Meadows' district -- said that 18 percent of its patients use Medicaid.

"We take care of a large percentage of Medicaid patients," Orr said. "We do benefit. We receive more than we pay in."

In Dalton, Ga., Hamilton Medical Center's Medicaid percentage was about 17 percent for 2011, said hospital spokesman Daryl Cole.

Rep. Tom Weldon, R-Ringgold, said the fee isn't really a tax, it's a way of funneling money from better-off hospitals to reimburse public hospitals that lose money because they get stuck caring for poor patients who don't pay their bills.

"This is not really a tax. This is a balancing ... of indigent care that is necessary," Weldon said.