NASHVILLE — Senators on Thursday approved a 3.52 percent fee on hospitals aimed at helping state government stave off hundreds of millions of dollars in TennCare cuts.
The measure was approved on a 25-5 vote and was sent to the House, which will consider it Monday.
No one voiced opposition to the measure, which was brought by the Tennessee Hospital Association to help block pending and proposed TennCare cuts that otherwise would go into effect July 1.
Sen. Ken Yager, R-Harriman, a co-sponsor, urged colleagues during the brief debate to vote “yes” on the bill, saying that for rural hospitals “it’s no overstatement to say the proposed TennCare reductions would threaten these hospitals’ very existence.”
Hospitals, the senator said, “voted to impose an assessment on their own patient revenues to trigger federal funds already set aside for this purpose. This assessment will not be passed along to the patients. In order to make this happen, the General Assembly must pass this bill.”
The bill would raise an estimated $310 million. About $230 million would be used by the state to attract about $430 million in federal matching funds, raising a total of about $659 million to offset hospital cuts.
The other $80 million would be redistributed among major hospital providers of TennCare.
Senate Minority Leader Jim Kyle, D-Memphis, said the president of the Regional Medical Center in Memphis called him to say “the Med would fail if this legislation doesn’t pass.”
The bill’s main sponsor, Sen. Doug Overbey, R-Maryville, said 26 other states have approved similar taxing methods to generate federal matching funds for their Medicaid programs.
TennCare, which primarily covers the poor, pregnant women, mothers and their children as well as some disabled Tennesseans, is the state’s version of Medicaid.
Hospitals would suffer a $659 million cut without the bill, Sen. Overbey said, noting, “there are no other reasonable options at this time.”
Both the hospital industry and lawmakers maintain the measure is not a tax, saying that because hospitals brought it to the General Assembly for approval and because it does not go into the general fund, it is a “fee” or “assessment.” They also take pains to emphasize hospitals have committed not to pass the fee along to patients.
Still, five senators facing tough re-elections or running for higher office voted against the bill. Among them was Lt. Gov. and Senate Speaker Ron Ramsey, R-Blountville, who is running for the GOP gubernatorial nomination.
“I just don’t think the timing was right for me to vote on that right now,” Lt. Gov. Ramsey later told reporters. “And I’m not going to criticize others who did that because I understand that, within their specific districts, that was a vote they needed to make.”
He declined to elaborate by what he meant when saying the timing was not right.
In March, he told reporters that he was open to the measure, saying he understood that, without the funds, “it will be devastating to hospitals.” He said at the time he would consider supporting it if the fee were a voluntary assessment, which it is, and not passed along to patients, which it is not.
Lt. Gov. Ramsey said that “most important” was that it not increase the federal deficit, which proponents said it would not do since Tennessee Medicaid costs would have already been factored into the federal budget.
In other legislative action Thursday:
HOW THEY VOTED* Sen. Andy Berke, D-Chattanooga — Yes* Sen. Bo Watson, R-Hixson — Yes* Sen. Dewayne Bunch, R-Cleveland — Yes* Sen. Eric Stewart, D-Belvidere — Yes* Sen. Ken Yager, R-Harriman –Yes
n The House voted 66-25 to approve a bill that permits Chattanooga’s Tivoli Theater and Memorial Auditorium to sell liquor and wine. It does that by including both facilities in the liquor-by-the-drink law’s existing definition of “historic performing arts center.”
The Chattanooga City Council passed a resolution asking local lawmakers to push the bill. It now goes to the Senate.
n Senators voted 28-2 to let employers require that their workers be able to speak English in the workplace. Proponents say it would protect businesses from lawsuits if someone is not hired because they cannot speak English or speak it well. The House passed a similar bill, but there are differences with the Senate version.