The Tennessee Hospital Association's board has voted to propose a one-year tax on hospital net revenue to avoid expected cuts of $540 million to the state's Medicaid program, TennCare, in the state fiscal year that starts July 1, according to the association.
Association pushes tax to skirt TennCare cuts
The level of the tax and other details are still being worked out, according to the association. The proceeds of the tax would be used to boost the state's contribution to TennCare, thereby releasing federal matching dollars—similar programs are in place in at least 26 other states, according to the association.
In a written statement, the association emphasized that “while hospitals will take care of patients as they always have, it is clearly the state's responsibility to fund TennCare.”
The proposed tax would be levied on all nongovernmental hospitals except for critical-access and rehabilitation hospitals and 56-bed St. Jude Children's Research Hospital in Memphis, an association spokesman said.
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