COLUMBUS, Ohio — Fresh off concessions in the state’s lower chamber, Ohio hospitals will continue their efforts to completely remove the downsides of a new franchise fee in the state’s budget.
Ohio House Speaker Armond Budish will substitute a formula by Gov. Ted Strickland that levies a franchise fee on hospitals. The fee would be used by the state to lure federal funding, but then Strickland’s plan would return a portion of that money back to the hospitals via increased Medicaid reimbursements.
Hospitals revolted over the state keeping any portion of the fee, called the budget unworkable and warned it would force thousands of layoffs statewide. Budish’s proposal increases the amount of money hospitals pay, but also gives more of that money back by increasing their Medicaid reimbursement, spokesman Keary McCarthy said.
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“The speaker has talked about what hospitals can be – not just through health-care services – but many hospitals throughout Ohio can be engines of economic development and job creation,” McCarthy said.
Mary Yost, OHA’s vice president for public affairs, said the end game for her group is the same: to recoup all of the money hospitals submit under the fee.
“The House is just part of the legislative process,” she said.
The OHA’s success comes during a budget season where virtually every sector is battling cuts or hikes. Another health-care fee increase – the nursing home bed tax – has not changed. The per day charge on every nursing home bed is doubled in the new budget. That remains in the House version and nursing home officials have warned that increase could bankrupt facilities and lead others to cut staff.
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McCarthy said Budish has had “preliminary discussions” about changes to that part of the budget. Wayne Hill, a spokesman for the Skilled Nursing Care Coalition, said legislators have been “receptive” to cutting the tax.
Hospitals across the state have cut jobs and more layoffs are predicted even without the fee. Unemployment and the uninsured have grown dramatically this year. But many Ohio hospitals have nonetheless maintained building and expansion plans, spent to acquire other hospitals and in previous years seen their non-profit foundations grow as much as eight figures in one year.
OHA may compromise by accepting state figures calculating the cost of the state fees. The association said the governor’s proposal would have cost hospitals $411 million while Budish’s proposal would cost $127 million. However, Budish told The Plain Dealer that Strickland’s plan costs $340 million, while his proposal leaves a $50 million deficit.
The OHA created its figures using 2007 Medicaid numbers, Yost said. As the association has received more recent figures the final calculation may favor the low numbers, she said.
“There is room for movement in the numbers,” she said.
[Ohio Statehouse photo courtesy of Flickr user Elessar]
