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Attention focused on provider fee in budget discussion

By BARBARA HOBEROCK World Capitol Bureau
Published: 5/13/2010  2:28 AM
Last Modified: 5/13/2010  4:33 AM

OKLAHOMA CITY — Support appears to be growing for a hospital provider fee to help with the state's budget crisis.

Senate and House Democrats said Wednesday that such a fee would attract federal matching dollars and would result in reduced or minimal cuts to state agencies.

"This would help us save and protect the public we all care about, the people who would be pushed out of nursing homes," said Sen. Andrew Rice, D-Oklahoma City.

"Two-thirds of the doctors of this state, if these cuts go through, will quit seeing SoonerCare patients, which is 900,000 Oklahomans."

Democratic lawmakers say that although they support revenue enhancement proposals to deal with a $1.2 billion budget shortfall predicted for fiscal year 2011, they will stall the process if a provider fee is not part of the package.

The concept has received past support from House Speaker Chris Benge, R-Tulsa, and Gov. Brad Henry, key players in the budget talks.

House Speaker Pro Tem Kris Steele, R-Shawnee, said: "I am very open to the concept of a provider fee. I do not believe it will solve our budget problems."

Senate President Pro Tem Glenn Coffee, R-Oklahoma City, called the fee "short-sighted" and Democratic lawmakers "irresponsible" for trying to hold a budget agreement hostage to it.

"Whether that is part of any agreement this year or next year needs to stay on the table in the budget agreement, and I couldn't comment further on that," Coffee said.

The Oklahoma Hospital Association has supported a hospital provider fee since 2005. More than 20 states have one.

"In light of the state's current budget crisis and the significant reductions in reimbursements hospitals have already experienced this year through across-the-board rate cuts and targeted cuts to specific health care programs, Oklahoma hospitals believe even more strongly the Legislature should pass a hospital provider fee this session," Hospital Association President Craig W. Jones said.

"It is an opportunity for hospitals to help themselves in receiving additional federal matching funds without adversely impacting the state or hospital consumers."

The association is working on a proposal that would exempt specialty hospitals, which have opposed a provider fee. Those hospitals take few, if any, Medicaid patients.

"Since revenue-raising measures must start in the House of Representatives, the OHA has been in discussion with the House's leadership as it refines its provider fee proposal," Jones said.

Republican legislative leaders and Henry have been tight-lipped about revenue enhancements under consideration, including a potential moratorium on some tax credits.

In a recent letter to lawmakers, Mike McDonald, chairman of the Oklahoma Independent Petroleum Association, cautioned against efforts to remove, cap or suspend tax provisions for the oil and natural gas industry.

"The oil and natural gas industry is the driving force behind Oklahoma's economy, and legislative efforts to end these incentives at time when natural gas prices are low, and trending lower, is counter-productive to helping our economy recover," he wrote.

Barbara Hoberock (405) 528-2465
barbara.hoberock@tulsaworld.com

Copyright 2012 World Publishing Co. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Reader Comments 5 Total
Glenn Coffee is a bozo. He calls this fee shortsighted? What about the alternative? What about when no doctors will see those 900,000 Medicaid patients and our Emergency Rooms overflow? Now that's short-sighted! This goof needs to be voted out.
Olaf (last year)
Crotchety,

mighty profound characterization of Mr. Coffee's public image. It would be hard to argue against your position considering Mr. Coffee's greater concern for his personal political legacy over the people he is commissioned to serve.

I do not understand how Mr. Coffee can object to an industry working to garner more funding for our state and call it a tax. Bewildered here? Someone needs to explain to me how Mr. Coffee considers turning down, at a minimum, $250 million dollars in additional federal funding to the state of Oklahoma short sighted.
History (last year)
Sounds like a good idea to me. It's been thought about for years and most medical providers are for it. Why not try something for the majority of medical providers and let the specialties fend for themselves.
iolana57 (last year)
I want to know exactly what a "hospital provider fee" is. No one seems to be talking about exactly what it is. Who pays it? Is it paid by the hospitals or to the hospitals? Is it paid by the doctors, the patients. It is very difficult to know whether something is good or bad unless you understand what it is and who pays it. I wish the lawmakers would explain exactly what they are talking about. They give these proposed laws names that may have nothing to do with what is actually being effected. I just would like a full explanation before I know whether it is something I should support or oppose.
@ iolana:

A provider fee would be an assessment charged to hospitals as a percentage of their total revenue. This fee would be collected by the state and used to secure more federal dollars.

it works like this, a hospital pays a provider fee of $1. That $1 is collected by the state. The State then uses it to pay for Medicaid services. When the state gives that $1 back to the Hospital for seeing a Medicaid patient, the Federal government kicks in an extra $2. Thus the Hospital ends up with $3 and that ultimately gets pumped through the economy. This would allow Hospitals to better weather cuts in Medicaid by helping Oklahoma keep up the rates.

This is a very simplified example, there is considerable nuance to the rules that govern this, but that is the general idea.
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