Hospitals warn new TennCare cuts would 'ruin' deal

Hospitals warn new TennCare cuts would 'ruin' deal

April 21st, 2010 by Andy Sher in Politics Regional

NASHVILLE -- Tennessee Hospital Association President Craig Becker warned Tuesday that any new state cuts to TennCare provider reimbursements will derail the group's proposal to charge a 3.52 percent fee to its members.

The fee is designed to offset previously planned TennCare reductions.

"This is about as far as we can go," Mr. Becker said. Further cuts "will ruin the deal for sure."

Last week, Republican Lt. Gov. Ron Ramsey, the Senate speaker who is running for governor, said he opposed Gov. Phil Bredesen's latest plan to lift a sales tax cap on big-ticket items to close an $85 million state revenue gap.

The Blountville lawmaker listed additional cuts in TennCare provider reimbursements among possible alternatives to the sales tax.

"Yes, there'd be across-the-board cuts. There will be maybe something on provider fees and TennCare," said Lt. Gov. Ramsey, who opposes the governor's sales-tax plan. "There's all kinds of things out there. There may be bonds that have been authorized but not issued."

In response to Lt. Gov. Ramsey's remarks, Mr. Becker drew a line in the sand. Members of the hospital association have "already done our share," he said.

"I have a deal with my members," he said. "This is as far as we're going to go. We're going to replace $659 million and it's about as far as they're willing to go. We've already done our share. Go to somebody else and ask them to do it."

The hospital industry proposed a one-year 3.52 percent fee or assessment on net patient revenues -- lobbyists and lawmakers alike reject the word "tax" -- to help offset Democrat Bredesen's plans to cut state TennCare funding by $429.9 million.

Cuts include a 7 percent, or $218 million, in reimbursements to providers, including hospitals, which go into effect July 1.

The hospital plan, which industry officials brought to lawmakers, would raise about $310 million through an assessment on hospitals.

About $230 million would be used by the state to attract about $430 million in federal matching funds. The remaining $80 million would be redistributed among major hospital providers of TennCare.

The bill for the hospital plan was delayed in the House Finance Committee Tuesday afternoon when the panel ran out of its allotted time before acting on it.

The Bredesen administration also has proposed new cuts, including a $10,000 annual in-patient cap on adult TennCare enrollees, which would cost hospitals about $149.7 million. That would cost the state $790.3 million in federal matching funds, a combined $1.22 billion blow to the program.

TennCare officials say a decision by federal officials to let the state keep $121 million in money that the state owes for Medicare prescription drug coverage also can be used to offset cuts.

Between the hospital and TennCare plans, most cuts would go away for a year, but long-term problems would not be resolved.

Meanwhile, Gov. Bredesen, who is barred from seeking re-election to a third term, suggested that Lt. Gov. Ramsey's recent moves are politically based.

"For the next month or so while the Legislature's here, I need a little more Ron Ramsey the speaker than Ron Ramsey the gubernatorial candidate," Gov. Bredesen told reporters Tuesday.

"I certainly understand if you're running for governor you want to take positions," the governor said. "At the same time, if you're a sitting official with the state, I think he needs to engage with this issue."

Continue reading by following these links to related stories:

Article: Council determined not to cut police ranks

Article: Chattanooga: Budget cut would mean layoffs

Article: Cleveland: Facing budget challenge

Article: Electric linemen get raises in Dayton