Hospitals consider tax to avert Medicaid cuts - East Valley Tribune: Politics

Hospitals consider tax to avert Medicaid cuts

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Posted: Monday, January 24, 2011 9:59 pm | Updated: 10:26 am, Tue Jan 25, 2011.

Arizona hospitals are weighing a tax on themselves as an alternative to sharp cuts in the state's Medicaid program.

Kristin Davis, spokeswoman for the Arizona Hospital and Healthcare Association, confirmed Monday that the group is looking at a way to raise hundreds of millions of dollars through some sort of levy. She declined to spell out exactly what form that would take or how much it would raise.

The aim, though, is to forestall the proposal by Gov. Jan Brewer to alter the eligibility standards for the Arizona Health Care Cost Containment System. That change, which the governor hopes to implement on Oct. 1, would save the state about $540 million for the coming fiscal year and potentially $1 billion the following year.

That move has provoked stiff opposition from the hospitals who would lose the reimbursement they now get from the state when an AHCCCS-eligible patient is treated there. Brewer's plan would cut total enrollment, now close to 1.2 million, by about 280,000.

On the other side of the equation, hospital officials said those who no longer qualify for free care would instead wait until their conditions are severe and show up for treatment in emergency rooms. Federal law prohibits hospitals from denying treatment to anyone in an emergency situation regardless of ability to pay.

"We are working on an option for the governor and legislative leaders to consider,'' Davis said.

While the details have not been formally unveiled, Senate President Russell Pearce, R-Mesa, said he can't support the idea.

"They're not taxing themselves,'' he said.

"They're willing to tax the people who use their services,'' Pearce said, with the cost passed along in higher charges. "It's not money out of their own pocket.''

Gov. Jan Brewer said she met with hospital officials two weeks ago and told them "they needed to find a solution'' if they want to avoid slicing the number of people enrolled in AHCCCS. But the governor said she's not sure, from what she's heard so far, the plan being considered for a "bed tax'' on hospital bills will work.

"From what I understand, the bed tax is probably not going to be enough from what has been presented to me to generate the kind of dollars that they're going to need,'' she said.

This isn't the first time hospitals have proposed new taxes.

Last year, when lawmakers first considered rolling back AHCCCS eligibility, the association proposed a surcharge on incomes greater than $150,000 a year for individuals and $300,000 for couples. That plan would have raised $174 million a year.

But the plan was quickly shelved amid legislative opposition.

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