Idea of Higher ‘Assessment’ to Help TennCare Floated

While a special 4.5 percent levy on hospitals appears to have broad support among legislators as a way to avoid $1.3 billion in cuts to TennCare in the coming year, some are proposing an even bigger fee to bring even more federal money into the state health care system.
“We do have an opportunity to pull up to the pump, and we ought to fill all the way up and not just fill up part of the way,” Rep. Joe Armstrong, D-Knoxville, said last week in advocating a 5.5 percent “enhanced coverage assessment.”
The assessment – proponents insist that it should not be called a “tax” – was initiated last year at the urging of the Tennessee Hospital Association to avoid a 7 percent cut in TennCare payments to health care providers and doctors. The levy was approved almost unanimously by the General Assembly in the 2010 legislative session, but it expires June 30.
In the current year, hospitals pay the fee based on 3.52 percent of their net patient revenues. The resulting revenue is used to trigger federal matching funds on the basis of roughly $2 in federal money for each $1. The money – both the new revenue from the assessment and the resulting federal funding – go to TennCare, which uses it to avoid cuts that would otherwise be made.
For the coming fiscal year that starts July 1, THA has agreed – with the support of Gov. Bill Haslam and key lawmakers – to raise the assessment level to 4.52 percent. That translates into about $450 million in state revenue from hospitals and a flow of $870 million from the federal government, or a total of $1.32 billion for TennCare.
Without that money, payments to health care providers would be cut by 8.5 percent, a loss that proponents of the move say would force some hospitals to close their doors and some providers to refuse TennCare patients.
Rest of the story HERE.
See also reports in the News Sentinel and the Chattanooga Times-Free Press on the impact of pending cuts to TennCare even with enactment of the ‘enhanced coverage assessment.” The News-Sentinel’s Kristi Nelson also has a story on the federal health care law’s impact on TennCare.

Leave a Reply