JACKSON — Few public policy initiatives in Mississippi have generated more heated arguments than the so-called “hospital tax” or provider assessment as a means to fund Medicaid.
Gov. Haley Barbour has spent the last several years battling the House over a $90 million “hospital tax” that he says will help shore up Medicaid financing by forcing state hospitals to “pay their fair share” of providing government-supported health care to the poor, the blind, the disabled and children.
The House and the state’s hospital association counter with the argument that other health care providers — doctors, pharmacists, drug companies, nursing homes, etc. — are not being asked to provide a similar “fair share” and that it’s not the responsibility of hospitals to help fund Medicaid.
Barbour argues that some of the state’s largest and most profitable hospitals are so-called “non-profits” and don’t pay the full compliment of taxes paid by private hospitals.
There are 108 non-state hospitals in Mississippi, with 39 of them publicly owned that pay no taxes other than employer taxes. Of the remaining 69 hospitals, 29 are “non-profit” hospitals that pay some sales taxes and employer taxes.
As the Mississippi Hospital Association points out, all hospitals pay the Division of Medicaid a “bed tax” on every bed in their facilities, whether the beds are occupied or not. And all hospitals already pay a gross revenue tax that helps fund Medicaid.
One number that’s missing from the hospital tax debate is the number that details gross patient revenue to the hospitals. The most recent gross patient revenue data available from American Hospital Directory — an online hospital data source that collects information from both public and private sources including Medicare claims data, hospital cost reports and other files obtained from the federal Centers for Medicare and Medicaid Services (CMS) — reflects Mississippi hospitals earning gross patient revenues of $16.19 billion.
Why does that number matter?
Hospitals make money in only a few major ways. One of the primary rules of thumb for how hospitals are paid is Medicare and Medicaid’s Diagnosis Related Group, or DRG pricing.
That means Medicare and Medicaid will pay “X” amount for a hip replacement without complications and “Y” amount for a hip replacement with complications — and there are hundreds of DRG classifications.
Hospitals likewise negotiate price structures with private insurance companies and health management organizations. The fact is that depending on your locale and the roster of insurance programs available to patients in that locale, both physicians and hospitals will make more or less money taking care of certain patients rather then others.
One question I’d like to hear answered is this: If Mississippi doesn’t levy a hospital tax, will health care costs be cheaper for the privately insured? Will the hospitals charge less for it? Will the $90 million left in hospital profits or retained earnings or non-profit foundations benefit the taxpayers, or will it benefit the hospitals? That’s a fair question.
The hospital with the largest Medicaid caseload in this state is the University of Mississippi Medical Center, and it’s all for levying a hospital tax — particularly on hospitals who limit the amount of Medicaid services they choose to provide.
