Oklahoma hospital fee proposal draws debate

Provider fee would allow state to access additional federal health care dollars.

BY JULIE BISBEE Published: May 16, 2010
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A hospital fee could generate about $73 million to be used as state matching funds for health care, according to a recent proposal from the state’s hospital association.

Those state dollars could attract about $136 million in federal health care dollars, officials with the Oklahoma Hospital Association said Friday. Hospitals would pay a 0.49 percent fee on all patient revenue and the fee would end in 2014, according to the proposal.

State-owned hospitals and specialty hospitals would be exempt from paying the fee, said Patti Davis, executive vice president of the association.

Officials with the hospital association, which represents 130 hospitals, have been meeting with lawmakers to discuss creating a provider fee.

Supporters say it’s a way to ensure funding for the state’s health care system. Opponents say it’s a tax.

Discussion about creating a hospital provider fee resurfaced last week when Democrats in the House and Senate said they would not support a budget plan that did not include a hospital provider fee.

In the waning weeks of the legislative session, Republican legislative leaders and Democratic Gov. Brad Henry are working to fill a $1.2 billion hole and crafting a budget for the 2011 budget year, which begins July 1.

Democrats argue that creating a provider fee would allow the state to attract additional federal health care dollars and help offset funding cuts.

Under the current funding structure, the state receives $3 for each $1 spent in state matching funds.

That rate is part of the federal stimulus program and ends Dec. 31. After that, the state could get $1.86 for each $1 it spends in matching funds, according to the Health Care Authority, which administers the state’s Medicaid and Medicare programs.

Senate President Pro Tempore Glenn Coffee, R-Oklahoma City, said a fee on hospitals is a tax.

"I’m opposed to it,” Coffee said.

"I have voted for the bill in the past to keep it alive and going through the process, but I have real concerns that it’s the right thing to do at this time. Given the depth of the hole and the lack of resources, next year would be a more appropriate time to have that conversation, if at all.”

Coffee said if there is legislation drafted, he doubts there would be adequate support for the measure, and without support from 75 percent of lawmakers, it could be subject to a legal challenge.


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