Corker’s Move Against Tax ‘Gimmick’ Draws TN Criticism

U.S. Sen. Bob Corker wants an end to what he calls a “massive ‘bed tax’ gimmick” that he says states use to “bilk the federal government” to fund their Medicaid programs, reports Andy Sher.
But critics warn the move would wreck programs in Tennessee and many of the other 46 states that use health-provider taxes to draw federal matching dollars for indigent care.
Tennessee’s taxes on nursing homes and health maintenance organizations and a 4.53 percent assessment on hospitals’ net patient revenues raise $837.8 million for TennCare, the state’s Medicaid program.
Under the 65 percent federal matching formula, that money draws down an estimated $1.55 billion to help fund TennCare. The program provides health care to an estimated 1.2 million low-income children, pregnant women and disabled Tennesseans.
…Corker spokeswoman Laura Herzog said in an email that as former Tennessee finance commissioner, “Sen. Corker understands why states and hospitals like this tax, especially given rising costs and the Medicaid expansion in the new health care law.”
But she said “the bed tax scheme adds to the federal government’s fiscal problems and is something both parties agree is poor public policy.”
States rely on the taxes because Medicaid is a “broken system,” she said. Corker’s plan would phase out bed taxes over 10 years and give states “more flexibility to manage their Medicaid programs, saving them and the federal government more money,” she said.
…Ending provider taxes “would clearly have such a devastating effect on TennCare,” said Gordon Bonnyman, executive director of the Tennessee Justice Center, a public interest law and advocacy group.
…Tennessee Hospital Association President Craig Becker flinched at Corker’s use of the word “gimmick” for the 4.52 percent assessment on hospitals’ net patient revenues.
“I think the senator was a little harsh in his use of words,” Becker said. “I don’t think it’s a sham. I think it is a way of keeping the state whole and keeping … services for the citizens of Tennessee. I know of no other way to do it.”

Leave a Reply