By T. Scott Boatright
During this month’s Lincoln Parish Police Jury meeting, representatives from Allegiance Health Management representatives requested the LPPJ to once again consider passing a new tax on the hospital that would unlock additional Medicaid funding.
The LPPJ could not vote on the matter during that meeting because it was not on the agenda for that meeting, but the LPPJ is expected to consider that request as an agenda item for the Jury’s April meeting.
Should the LPPJ agree to that request in April, it will proceed with the public notice process needed in order to pass the hospital tax during its May meeting.
Allegiance Health Management is hoping that move could result in higher federal reimbursements for treating patients on Medicaid.
The LPPJ passed such a new tax in 2022 before Gov. John Bel Edwards vetoed the proposed state law that would have allowed the process to occur.
But the proposed tax was brought up again and passed during last year’s state legislative session, prompting Allegiance to ask the LPPJ to pass the tax request again.
What it all means is that the parish would levy what is basically an occupational license tax on Northern Louisiana Medical Center (NLMC.
The hospital would pay the tax with the LPPJ and Lincoln Parish Sheriff’s Office would each receive parts of those proceeds with the remainder being moved into the state Medicaid program, where it would help the state receive a larger reimbursement from the federal government with that additional funding then being passed back to NLMC.
NLMC CEO Kathy Hall said during this month’s LPPJ meeting that the tax will end up allowing the hospital and its providers to treat patients who are on Medicaid without losing money in the process.
“We do serve a lot of Medicaid patients in our population, and our responsibility is to take care of everyone in our community,” Hall said. “But you bring a doctor in, they see a Medicaid patient, and their reimbursement is $38 to $40. And it costs more than $38 to see a patient by the time you employ staff.
“So, this supplemental funding helps to close that gap for the providers to make sure we can pay these providers what they deserve to be paid.”
Allegiance Attorney Nicole Frey said during the LPPJ meeting earlier this month that the tax would bring no new costs to parish taxpayers or NLMC patients.
“The hospital cannot add a supplemental fee or charge to the patient bill to pay for (the tax),” Frey said.
Frey said the need for the tax is because Medicaid is what she called “so woefully underfunded” that every time a hospital performs care on a Medicaid patient, it loses money.
“The state is maxed out, but the parish’s have to step up and help, which is why this law was written,” Frey said.
Frey said that if Allegiance’s tax request is passed, a working committee would be created.
“We form a committee under LDH (the Louisiana Department of Hospitals) and will crunch and bring back the numbers and then the committee would meet again and under resolution would pass the (tax) rate. The Sheriff is the collector and will collect the assessment, take off their fee, turn over the money to the parish with the money going into a dedicated checking account, and then by an inter-government transfer agreement with LDH, the parish will send the money to the LDH.
“I know it sounds strange that the hospital wants to pay this assessment, but the assessment goes into the Medicaid program and the state’s share of funding Medicaid is roughly 27 to 37 cents (on the dollar). The federal government pays the rest. So, this is a funding mechanism to draw down more federal money that comes back to (NLMC) to help it counter its costs.”
According to the Medicaid and CHIP Payment and Access Commission (MACPAC), health care-related taxes have become a more common funding source for state Medicaid programs over the past 15 years.
MACPAC reports that in the state fiscal year (SFY) 2019, 49 states and the District of Columbia imposed at least one health care-related tax, up from 35 states in SFY 2004. In SFY 2019, the most common health care related taxes were levied on institutional providers, with 45 states imposing at least one tax on nursing facilities, 43 states imposing hospital taxes, and 35 states imposing taxes on intermediate care facilities for individuals with intellectual disabilities
