NASHVILLE – Senate General Welfare Committee members on Wednesday unanimously approved a 3.5 percent “coverage assessment” on hospitals that would help raise $659 million in funds to offset planned TennCare cuts that otherwise go into effect on July 1.
The cuts would have a “serious detrimental impact on hospitals across the state,” the bill’s sponsor, Sen. Doug Overbey, R-Maryville, warned panel members.
The assessment – lawmakers reject calling it a tax because hospitals themselves are pushing it for a specific purpose – would raise $229.5 million. The money would be used by the state to attract about $430 million in federal Medicaid matching funds, offsetting many of the cuts Democratic Gov. Phil Bredesen has proposed or lawmakers already have approved for the 2010-11 budget.
Sen. Overbey emphasized it will not increase patients’ hospital bills and would not add to the federal deficit because the federal funds would not exceed a cap on what TennCare can receive in the current federal budget.
Desperate to avoid cuts such as a $10,000 annual cap on the amount of money the state pays hospitals for a TennCare patient’s hospitalization, the Tennessee Hospital Association’s board approved the proposal.
The Tennessee Medical Association, which represents physicians, came out in support of the “assessment” Wednesday.
Memorial Health Care System Vice President Howard Roddy, of Chattanooga, said that without the coverage assessment, “everyone would be impacted by this – hospitals, patients, providers, the state.”
Sen. Bo Watson, R-Hixson, voted for the measure that now goes to the Finance Committee. It has yet to move in the House.