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Valley hospitals hope to break even or gain through proposed franchise fee
The concern is that some hospitals may not get back 100 percent of the franchise fee.
YOUNGSTOWN — Area hospitals hope a proposed 1.6 percent state franchise fee will be returned to them dollar for dollar, but nothing is set in stone.
The final numbers are still unknown, even with the July 1 deadline for passage of the fiscal 2010-2011 state budget less than three weeks away, but it appears some hospitals may actually come out financially ahead in the long haul.
The state proposes to use revenue generated by the fee (about 1.6 percent in the first year of the biennium budget and about 1.5 percent in the second year) levied on hospitals and other health-care providers, to draw an additional $2 billion a year in matching funds from the federal government for the state’s Medicaid program.
Under Gov. Ted Strickland’s initial proposal, hospitals stood to lose large sums of money. After moving through House and Senate committees, however, changes in the budget bill have hospitals about breaking even, according to the Ohio Hospital Association.
At this point, working from the Ohio Senate plan, an amount equal to fees paid by all of Ohio’s hospitals would be returned to them in aggregate in the form of cash; and the majority through a 5 percent increase in regular Medicaid reimbursements and an increase in other Medicaid payments, according to the Ohio Hospital Association.
Hospitals are now reimbursed only about 86 cents for every dollar’s worth of health care they provide to Ohio’s 1.8 million Medicaid patients, the association said.
A big unknown factor, said Jeff Rexroad, Forum Health administrator for patient financial services and care, is the refunding formula.
“We are hopeful that all individual hospitals get back dollar for dollar the amount of the franchise fee. It is our hope that there is no redistribution of wealth in the refunding formula,” said Rexroad.
Read the full story Monday in The Vindicator and on Vindy.com.