Ga. House adopts Medicaid financing fix

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February 3, 2013

Ga. House adopts Medicaid financing fix

Anonymous Associated Press Sun Feb 03, 2013, 08:00 AM EST

ATLANTA — Gov. Nathan Deal scored a key budget victory as the House of Representatives approved his plan to avoid losing more than $450 million in federal money for the Medicaid insurance program.

The 147-18 vote sends Senate Bill 24 to Deal's desk for his certain signature, and it completes a two-week whirlwind for an issue that once promised to dominate the General Assembly's session as lawmakers sought to avoid steep health care cuts without explicitly voting for a tax.

The measure will allow an appointed state board to levy a tax on Georgia hospitals' net patient revenue with the money being used as state match to qualify for federal Medicaid support. That structure will replace an existing tax that the Assembly imposed in 2010 amid sagging revenues wrought by the Great Recession. That levy expires June 30, the end of the state's budget year.

Both concepts reach the same end: parlaying Georgia health-care money into even more money that is plowed back into the same system through higher payments for treating Medicaid patients. Deal and legislative leaders pitched the vote as an absolute necessity.

"This was a tough vote today, but our members did the right thing," House Speaker David Ralston said.

Georgia's Medicaid program serves more than 1.5 million people at a cost of about $5.8 billion to federal taxpayers and $2.6 billion to the Georgia treasury. Most of the beneficiaries are children, elderly adults or disabled adults from low-income households.

With the current scheme accounting for about 8 percent of the program, legislators came into their annual session under competing pressures.

The hospital industry, physicians and other health-care providers wanted some kind of extension of the existing tax — which is 1.45 percent of net patient revenue — to prevent Medicaid payment cuts to local hospitals and physician practices. But anti-government activist and national GOP powerbroker Grover Norquist publicly urged lawmakers not to extend the tax.

The dynamic left lawmakers fearing re-election attempts cast as either tax-raising politician or as someone who gutted health care. So Deal fashioned Senate Bill 24 as a way to preserve the pot of money and allow lawmakers to say that, at least technically, they didn't vote for a tax.

Nonetheless, legislators kept some control over the details. The final version of the bill states that the Community Health Board — nine appointees of the governor — cannot raise any more revenue from the hospital assessment than is called for in the state budget passed by lawmakers. A second set of changes allows an oversight committee of legislators to block a levy set by the board, with the full Assembly having a say when they are in session. The new structure would expire in 2017.

All states except Alaska use some iteration of the scheme to maximize their Medicaid budgets, and Georgia law already allows the health board to impose a "provider fee" on nursing homes to increase the federal contribution for Medicaid.

Some Democrats, whose party is in the extreme legislative minority, mocked Republicans for refusing to acknowledge the model as a tax. A handful of critics have also argued that the bill is unconstitutional because it raises revenue yet did not originate in the House, as is constitutionally required for tax bills. Most Democrats still voted with Deal and his fellow Republicans.

GOP arguments, meanwhile, sounded much different than what conservatives like Norquist often push, particularly in arguments over federal fiscal policy.

Rep. Matt Hatchett, the governor's floor leader, reminded his colleagues that Deal's administration projected a 20 percent cut to Medicaid payment rates. That was enough, he said, to force hospitals to close and to drive more physicians away from taking Medicaid altogether. Losing that government spending would cause "a ripple effect" throughout local economies, he said, and "would be catastrophic to our already struggling health-care system as we know it today."

House budget Chairman Terry England, R-Auburn, quoted Jesus as recorded in the New Testament. Citing Matthew 25:40, he said, "I say unto you, in as much as you have done it unto one of the least of these my brethren, you have done it unto me."

A Deal spokesman said the governor will not sign the bill immediately, but will do so in time for the revenue to be included in the revenue projections lawmakers must use to write the 2013-14 state operating budget.

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