Hospitals balk at plan for tax hike

May 22, 2009

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JACKSON -- Hospitals can absorb a $45 million tax increase to help fund the deficit-plagued Medicaid program, but the higher rate the governor is pushing for would hit them too hard, said the president of the Mississippi Hospital Association. 

 


"It will lead to reductions in services. It will lead to a reduction in the staff employment in the hospitals," Sam Cameron said of the $90 million tax that Republican Gov. Haley Barbour wants. "We think this is totally not fair for the patients." 

 


The Democratic-controlled House agrees but has offered to accept a lower amount in trying to reach a compromise with Barbour and the GOP-led Senate. 

 


The governor wants hospitals to pay the tax to fill Medicaid''s $90 million budget deficit and attract the federal matching funds the additional revenues bring. 

 


This is just a small part of Mississippi''s $4 billion-a-year Medicaid budget, but the persistent squabbling over how much hospitals should pay has left the health-care program for the poor in limbo. 

 


State government''s overall $19 billion budget for the next fiscal year is also on hold as lawmakers try to reach a deal on the hospital tax and other financial issues. 

 


House-Senate negotiations continued today for a budget accord to be ready for the Legislature when it returns Tuesday to resume its prolonged annual session. The House and Senate are two months late in having a budget ready for the fiscal year that starts July 1. 

 


"I don''t know when the light will appear at the end of the tunnel," House Speaker Billy McCoy, D-Rienzi, said in a statement he issued Thursday. "The House remains prepared to work." 

 


Cameron said hospitals already pay a $145 million-a-year Medicaid tax but are willing put up another $45 million "because of the dire state of the state budget." 

 


"It''s a stretch, but the hospitals can pay the $45 million. But they can''t pay $60 million and they can''t pay the $90 million," Cameron said. 

 


He noted about 50 of Mississippi''s 130 or so hospitals were losing or making no money before the current economic recession began a year ago, which has since worsened their financial conditions. 

 


Barbour says hospitals are just trying to evade a tax they once paid that provided "their fair share of the cost of caring for Mississippi''s neediest citizens." 

 


"Now they say they don''t want to pay their fair share anymore. If they don''t, that''s a terrible, destructive effect on the budget," Barbour said. 

 


Cameron said Barbour''s arguments for the $90 million hospital are full of "myths" and "misinformation." The governor is trying "to balance the Medicaid budget on the backs of hospitals," he said. 

 


Cameron''s association sued Barbour a couple of years ago when he tried to impose the tax without legislative approval.