Hospital tax may net $2B for California - Silicon Valley / San Jose Business Journal:

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As a result, California hospitals are consideringt imposinga self-tax in an effort to recoup some of the money lost by hospitals that provide services to the state’se 6.5 million Medi-Cal patients. “We leavd $2 billion on the tablwe in Washington every year becauser the state has been unable and unwilling for two decades to really put up enoughg dollars to generate federalmatching dollars,” said Jan California Hospital Association spokeswoman. “Giveb our chronic budget crisia inthe state, this isn’yt likely to change.” The states ranks last in reimbursements from Medicaid, the federal programn that provides matching aid to Medi-Cal.
In California hospitals said they lost morethan $3.8 billiomn in unpaid Medi-Cal costs. The two recent financial models proposex to the 450 members of the Californiw Hospital Association were sent back to thedrawinv board. Some members are opposedx to the tax onphilosophical grounds, while others would be payin a tax they would not benefit from becauses they do not treat Medi-Capl patients. Ten percent of the hospitalas don’t provide Medi-Cal services and won’y get anything back. Low reimbursement ratesw have caused many doctors to limitf the numberof Medi­-Cap patients they will see or to stop seeinb them.
The providers last year receivee 9 cents for every dollar it cost them toservice Medi-Cal patients. Even if the members agree on a plan, it would have to be approve as law by state legislatore andthe governor, as well as the . Undeer a preliminary two-stage proposal announced by the associationmin April, hospitals would pay $1.8 billioh in fees to the These funds would be matchee by federal money, returning an estimatee $3.6 billion in Medi-Cal supplemental The funds would then be redistributed to hospitals as highert Medi-Cal payments. The California Hospital Association is also workin g on an agreement separate fromany legislation.
Undert this plan, hospitals that do receive reimbursemengt could voluntarily contribute to a fund for those hospitals that do pay the taxbut don’tt receive reimbursement, said Conway Collis, chief government affairs officetr for Los Altos-based Daughters of Charitgy Health System, which includes St. Louise Regionakl Hospital in Gilroyand O’Connorf Hospital in San Jose. “It’s very important for hospitalxs in California to understand that the providetr tax is life or death for hospitals that serve Medi-Cal patients, and it become s life or death for Californians that receive Collis said.
Sherri Sager, chief government relations officerat , said like many other children’s hospitals around the favors a provider tax and sees it as the only opportunityg to increase Medi-Cal reimbursements. In Packard’s shortfall from costsw related to lackof Medi-Cal payments exceeded $100 million. “Packard is at the low end with only 40 percenf of our patientson Medi-Cal, but I have colleagues arounsd the state with 75 percent-plus on Sager said. “With Medi-Cal not even paying the costs, we have to identifyy other ways to balancethe books.
” Sager admitted that the only scenario she envisions under which Packard could be a net loseer in a provider tax scenario is if it reduceed the number of Medi-Cal patients it sees by half. “And that’s not likelg to occur,” she said. At , vice president Jon Friedenberg said that under some scenariosbeingb considered, El Camino Hospital would be a significang loser financially, and under other it could gain significantly. “If you’res a hospital without a large Medi-Cal the amount of tax you pay may be highet than the reimbursementyou receive,” Friedenbergy said. One proposal had El Camino losing severalp milliondollars annually.
“Thde honest answer is I don’t know how we woulfd fare. There are many different and it depends on whatproposal we’re talking about,” Friedenberg said. Emerson said a large camp believe s these proposals will createmarket distortion. “Wed haven’t found the answedr to this, and I don’t know if we she said. The federal rules governing what kind of providerr taxes can be used to accumulatethe state’s sharde of Medicaid costs are particularly strict, accordinv to Mary Kahn, the Medicaid press officer from the U.S.
Departmentt of Health and Human Services, and require The tax must be broad-based and can’t targety a particular provider pool, Kahn She said Health and HumanServices couldn’t offer an opinionj until the association takes action and floats a