NASHVILLE - House members voted 91-5 Wednesday and sent a 3.25 percent "fee" on hospitals to Gov. Phil Bredesen.
"This legislation allows the Tennessee hospitals to step into place on an interim basis to provide critical funding to our TennCare budget," House Health and Human Resources Committee Chairman Joe Armstrong, D-Knoxville, told colleagues.
The Tennessee Hospital Association sought the one-year measure - which lawmakers argue is a fee or assessment and not a tax increase - because hospitals sought it to avoid massive TennCare cuts. While Gov. Bredesen has not specifically said he will sign it, he and top administration figures have sent strong signals that he will.
It would raise at least $310 million and draw down an additional $582.7 million in federal matching funds, according to a legislative cost analysis. The money would be used to offset hundreds of millions of dollars of pending and proposed TennCare cuts that otherwise go into effect July 1.
Both Democrats and Republicans caucused before the vote, and debate was held to a bare minimum.
"I just want to state again that these funds will not be coming from patient revenue," said Rep. Joey Hensley, R-Hohenwald, seeing reassurance from Rep. Armstrong.
Rep. Armstrong agreed, noting the money would be used to draw federal matching funds for TennCare, the state's version of Medicaid.
Erlanger Health System CEO Jim Brexler, chairman of the Tennessee Hospital Association, said in an interview later that "obviously we're very pleased and appreciative that the Legislature moved forward to pass this legislation.
"As you know, this was legislation introduced by the hospitals because we believe it just is critical that these devastating TennCare cuts not be enacted," Mr. Brexler said.