Catholic bishops in Ohio have joined the states hospitals calling on Gov. Ted Strickland to ditch plans for a new hospital assessment, which the Ohio Hospital Association estimates would cost hospitals $598 million but return less than a third of that figure in increased Medicaid payments.
The assessment, called a franchise fee, is included in Stricklands two-year budget. It would collect 1.27% in 2010 and 1.37% in 2011 of each hospitals total facility costs. The proceeds would be used to draw federal matching funds and reduce the burden the Medicaid program places on the states general fund.
With the mounting fiscal challenges facing the state, we are keenly aware of the financial pressures surrounding health and human service programs, Archbishop Daniel Pilarczyk wrote to Strickland on behalf of the Catholic Conference of Ohio. We also believe, however, that additional revenues generated by the hospital franchise fee must be returned to our local communities to preserve the safety net that our institutions represent throughout the state.
Catholic hospitals in Ohio, according to the letter, stand to suffer a net loss of at least $75 million under the plan.
The letter also echoes the hospital associations opposition to language in the budget that would require hospitals to provide care to members of Medicaid managed-care plans even if they're not under contract with the managed-care contractor. The provision, the hospitals argue, creates a reimbursement ceiling and eliminates the incentive for the managed-care companies and hospitals to negotiate.