Columbia/HCA Healthcare Corp. has filed an administrative complaint against a Florida healthcare agency in a dispute over indigent-care funds.
Columbia is seeking to prevent the Florida Agency for Health Care Administration from collecting indigent-care trust fund money for hospital-based home health services from 14 of its hospitals. An estimate of Columbia's tax obligation was not available.
Earlier this year, the state agency sent letters to more than 212 acute-care hospitals in Florida, informing the hospitals they must count home health revenues as operating revenues for tax purposes.
By law, Florida imposes a 1.5% tax on hospitals' operating revenues to support indigent care at some of the state's large public teaching hospitals. The bulk of the $225 million from the trust fund goes to Jackson Memorial Hospital in Miami and Tampa (Fla.) General Hospital.
The Florida Hospital Association, which also opposes the tax, said it will file a separate complaint and request a hearing on the matter during the next several weeks, said William Bell, the FHA's general counsel.
Bell said the FHA supports elimination of the indigent-care trust fund tax. The FHA believes the state should support indigent care through general revenue funds, he said.
At stake is $9.8 million in taxes Florida hospitals are required to pay as a result of home-care revenues, said Sandy Berger, an agency spokeswoman. Last year, 39 of 99 hospitals paid a total of $4.4 million in taxes on home health services, she said.
Bell said Columbia and the FHA dispute the agency's power to collect the money on three main grounds: the tax on home health revenues was never codified in state administrative rules; the agency has allowed nearly 60 hospitals in the past to avoid paying the tax; and freestanding home health agencies don't pay the tax.
Berger cited sections of the Florida statutes and Florida Administrative Code as clearly allowing the tax for hospital-based home health agencies. She admitted that confusion within the agency resulted in the tax not being enforced at some hospitals over the past few years.
However, the tax issue came to a head last year as a larger number of hospitals, including Columbia facilities, began to eliminate home health revenues from operating funds, Berger said.
The agency also is battling two bills in the Florida Legislature that would strip authority of the agency to collect taxes on home health revenues from hospitals. The bills also would remove from operating revenues hospital outpatient revenues and other "operating revenue generated by licensed professionals."
If approved, the bills could be used as loopholes for hospitals to avoid paying as much as $222.4 million, which would gut the indigent-care trust fund, Berger said.