Ohio hospitals will get a $150 million reprieve from a tax established last year as officials struggled to shore up the state's budget.
Gov. Ted Strickland announced the development as part of a plan to distribute $518.6 million the state will get under the extension Congress approved in August of federal Medicaid assistance under the American Recovery and Reinvestment Act of 2009.
The adjustment erases a gap that drew fierce opposition to the plan from the state's hospitals, which said they would be forced to cut services and jobs. The so-called “franchise fee” levied a tax on hospitals' total facility costs in order to increase federal matching funds for the state's Medicaid program. Hospitals got a 5% bump in Medicaid reimbursement rates in return but were on the hook to pay $150 million more than they would get back.
Hospitals now will pay reduced fees for their next three installments, a spokeswoman for the Ohio Hospital Association said. The association issued a message of thanks to Strickland. “Ohio hospitals are very pleased with Gov. Strickland's decision to support jobs in one of the state's strongest growth sectors,” President and CEO James Castle said in a news release.
