The board of the state’s hospital association plans to meet to discuss whether to ask the legislature to tax the hospitals, following the release of Gov. Phil Bredesen’s budget, which contained a proposal that would cut roughly 9 percent of TennCare’s $7 billion budget. Hospitals predict they would lose $526 million in state and federal funding this year and next if state lawmakers approve the governor’s budget.
The tax being considered by the Tennessee hospitals would be on a hospital’s revenue. It would be capped by federal law at 5.5 percent, lower than the 6.75 percent the hospitals were taxed in the version that expired in 1994, and could be much lower, The Tennessean reported.
Hospital industry representatives have also said they would want guarantees that the tax would be used to shore up their TennCare payments. Lawmakers and representatives from the governor’s office have said they would only support a tax increase that is proposed by the hospitals and has industry support. Other ideas the hospitals are considering include asking the state to tap into its reserves to shore up TennCare.
CMS would have to approve a hospital tax before it could be implemented.
Read The Tennessean’s report on the Tennessee hospital tax.
