By Jim Wilkerson
In this week’s Lincoln Parish Police Jury meeting, two attorneys – Nicole Frey and Greg Frost – presented a proposal that could potentially benefit both the Northern Louisiana Medical Center and the Parish. The concept essentially was this:
The Police Jury can levy an occupancy license tax on the hospital up to 6 percent of the hospital’s net income. The Parish gets to keep up to 5 percent of the tax, and the rest of the 95 percent goes to the State of Louisiana to fund the state’s portion of the Medicaid program. The state taxes collected will then result in an increase in the matching funds the federal government gives to the State of Louisiana. The increase in federal funds can then be used to pay for the hospital’s Medicaid expenses, which the State government is currently having trouble paying. Ultimately, the Parish, the State, and the hospital benefit from the program, while the federal government pays – according to the attorneys.
“It’s a simple mechanism to pull down federal money to our hospitals,” said Frey. “Most of [the money] goes back to the hospital in the form of enhanced funding from the State.”
To give a little background, Frey and Frost are two attorneys in the Breazeale, Sachse & Wilson law firm. Both represent the Northern Louisiana Medical Center and want what is best for the hospital. In other words, the attorneys are not government authorities who simply want to impose a tax on the hospital. They want the hospital – their client – to profit.
According to Frey and Frost, Act 330 of the 2020 Louisiana Legislature gives certain local governments the authority to tax nongovernmental hospitals up to 6 percent of the hospitals’ net income. What happens after the taxes are collected and reported is that the federal government essentially pays for Medicaid expenses by matching the extra funds received by the State. The Parish gets to keep the 5 percent it collects, and the hospital benefits by having its Medicaid expenses paid for.
The purpose behind all this is that the Medicaid program is performing poorly and is not sufficiently reimbursing hospitals for treatment of patients. This will fix some of that problem, Frey and Frost suggested.
“The hospital recovers the cost of the tax through Medicaid, in which the federal government pays a larger percentage,” Frey summarized.
Before the Police Jury can have an official say on the matter, an advertisement laying out the details of the tax must be published in a local newspaper thirty days prior to passage. After the publication, the Police Jury can convene to vote on whether to implement the tax.
Of course, this raised some questions among several members of the Police Jury. The first question related to Ruston Regional Specialty Hospital and how that hospital will fit into the tax. Frey and Frost responded that, at the moment, Ruston Regional will neither hurt nor benefit from the tax. Police Juror Annette Straughter urged the attorneys and other Jurors to look into including Ruston Regional in the plan before submitting the advertisement.
Police Juror T.J. Cranford also had concerns about moving forward too quickly with a tax program that involves multiple levels of government. He and others recommended that the Police Jury be given enough time to study the tax before deciding anything.