Bed Tax

"'Round and 'round we go and where we stop nobody knows".  A familiar phrase to some, but very appropriate when it comes to Georgia hospitals.

The state’s “bed tax” — a fee that Georgia hospitals pay to help prop up the state’s Medicaid program. Hospitals pay the bed tax to the state, and the state sends the money back to them according to the level of Medicaid care they provide. The scheme has meant millions in revenue for Children’s and millions in losses for Piedmont; that’s because 55 percent of patients at Children’s Healthcare are on Medicaid; at Piedmont Hospital in Buckhead, the total is less than 3 percent.

AJC, "Bed tax hospital windfall or loser"

It depends on whose ox is being gored.

Hospitals that depend on Medicaid payments become "winners" while hospitals that treat patients that pay their own bills (with or without private insurance) become losers.

Expect this redistribution of wealth to become more protracted in the post 2014 Obamacare world.

In metro Atlanta, Grady Memorial Hospital and DeKalb Medical Center also see a windfall from the bed tax, but the fee acts as a financial drain on St. Joseph’s, Emory University Hospital and Northside Hospital as well as Piedmont.

Grady is the local charity hospital supported by taxes and Medicaid. St. Joe, Emory, Northside and Piedmont have mostly private pay patients.

 Hospitals pay a “provider fee” of 1.45 percent of net patient revenue. (Trauma centers pay 1.40 percent.) The state uses the money to pump up what it pays hospitals to treat Medicaid patients by 11.88 percent. Because the Medicaid program is jointly paid for by the states and the federal government, Georgia can use the money collected from the hospitals to draw down federal matching funds.

The fee is designed to help level the financial playing field among hospitals, since Medicaid pays less than what it costs to treat patients covered by the plan.

Yes, Medicaid pays less than any other form of insurance. Makes you wonder how this will play out in 2014 and later when the Medicaid rolls are expected to expand by 15 to 20 million.

This Obamacare thing is not going to be pretty.