GA’s Extended “Bed Tax” Impact on Elbert Memorial

February 21, 2013

Georgia’s Governor Nathan Deal recently signed legislation into law that extends power to hospitals to levy a fee to help with Medicaid reimbursements.

Also referred to as the “bed tax”, the program passed the Georgia General Assembly by a substantial margin.

Elbert Memorial CEO Jim Yarborough explains how the fee helps Elbert Memorial.

“Basically it is a mechanism for the state to receive funds from participating hospitals”, said Yarborough. “They use those funds to get matching funds from the federal government, and use that to fund the Medicaid payments.”

He says that a good portion of Elbert Memorial’s revenue comes in through Medicaid payments.

The “provider fee”, as it is also called, will now be set each year by the Georgia Department of Community Health.

Currently, the fee stands at 1.45% of net revenue for all participating hospitals.

Elbert Memorial’s share comes out to about $168,000 per year or $42,000 per quarter, which is when the fee is paid.

Yarborough says that without this program, things could be potentially bad for hospitals that rely on Medicaid payments.

“Worst case scenario there was a potential that they could actually reduce the Medicaid funding to the hospitals for the services, and retain more of those fees for the state budget”, explained Yarborough. “In essence it could have potentially reduced our Medicaid payments.”

Governor Deal and legislative leaders, prior to the bill being signed into law, had warned that without the money from the program, that up to two dozen hospitals could have faced potential closures.