Robinson defends tax on Miss. hospitals to lawmakers

Published 6:24 pm Friday, September 29, 2006

Robinson defends tax on Miss. hospitals to lawmakers

JACKSON (AP) — Medicaid executive director Bob Robinson on Thursday defended the decision to tax hospital revenues to help make up a shortfall in his program’s budget.

Changes in federal rules require that Mississippi come up with $90 million to ensure hospitals don’t lose $270 million in federal Medicaid money this year. Gov. Haley Barbour’s solution was to begin taxing hospitals, which the state did earlier this month.

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The Mississippi Hospital Association and 43 hospitals have filed a lawsuit asking the Hinds County Chancery Court to declare the tax unconstitutional.

Medicaid is a federal-state program that provides health coverage for the needy, aged, blind and disabled and for low-income families with children. It serves about 748,000 Mississippians, roughly a quarter of the state’s population.

Barbour has said Medicaid has a $90 million budget shortfall because the federal government is stopping Mississippi and other states from using a complicated funding formula that had allowed the states to receive more federal money. The $90 million has been provided through an assessment on the University of Mississippi Medical Center and other publicly owned hospitals.

Robinson said it only seems fair to tax the private hospitals as well.

“Public hospitals have been footing the bill. Private hospitals haven’t contributed anything” Robinson told members of the Joint Legislative Budget Committee. “We’ve got some hospitals making a ton of money.”

Lawmakers asked Robinson what Medicaid will do about the funding shortfall if the lawsuit is successful.

“We would have to come to the Legislature and say, ’We need help,”’ Robinson said.

He said state law requires that the governor be informed about the shortfall and Barbour would have the authority to make cuts within the program.

For every $1 Mississippi puts into Medicaid, the federal government puts in almost $3. So, a $90 million shortfall in state funding translates into a loss of $270 million in federal money — $360 million total.

The tax plan would allow Medicaid to levy a tax on the gross revenue of the state’s hospitals. The plan would generate money needed to sustain half of the state match for federal funds. The other $45 million would come from state money appropriated by the Legislature in 2007, under Barbour’s proposal. Lawmakers have not said whether they’ll agree to the governor’s plan.

House Appropriations Chairman Johnny Stringer, D-Montrose, said he hopes Medicaid could make it through June 30, the end of fiscal year, without asking for more state money.