Tag Archives: gimmick

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.”

Corker Bashes Hospital ‘Bed Tax’

Tennessee Senator Bob Corker, who is an increasingly central character in the fiscal cliff drama, wants to end what he calls a “massive bed tax,” reports WPLN. Hospitals say without it, some could be forced to close.
This “fee” has propped up the TennCare system since 2010, producing $450 million a year. In the face of dwindling state budgets, hospitals tax themselves and get the money right back. But the accounting maneuver allows the state to draw down federal matching funds.
Corker calls it a “gimmick” that is bilking the federal government, and he’s calling for the practice to be phased out. Tennessee Hospital Association president Craig Becker says the fee is less than ideal, but he disagrees with how it’s being characterized.
“I think the senator was a little harsh on his language when he called it a scam because it’s not a whole lot different than any other assessment or tax that’s out there.”
While Senator Corker has become a vocal critic of the bed taxes, he isn’t the first. The debt reduction commission known as Simpson-Bowles also recommended elimination of the financing scheme now used in 47 states.