MHA's Friday Update Messages

MHA Friday Update Weekly Messages

A Nick to the Sick Tax

January 19, 2018 By: Your MHA Team

On Wednesday, Gov. Larry Hogan released the fiscal 2019 budget for Maryland. In it, he calls for a $25 million reduction in the hospital Medicaid ‘sick tax.’ This comes a year after the governor hit pause on the $25 million annual spend-down to which he had committed earlier in his term. Well ahead of the budget release, the hospital field made clear in a letter signed by all acute care hospital CEOs to Gov. Hogan that reducing the tax is the field’s top priority. Not only does the reduction help hospitals meet the goals of the All-Payer Model, it also lessens a longstanding burden on patients.

Though the $25 million reduction falls short of the accelerated $35 million spend-down agreed to last year, it demonstrates the power of the hospital field when it speaks with a unified voice, especially considering that the governor had to make up a nearly $300 million gap between revenue and spending this year.

The governor heard hospitals’ message and took action.

Other budget highlights include $5.5 million for the hospital capital bond program, an increase of $500,000, and, based on initial analysis, $41 million for Institutions for Mental Disease, including $5 million for physician services. This represents full funding for these invaluable facilities as the state addresses the growing behavioral health crisis.

Now, MHA will focus on protecting the $25 million spend-down and looking for opportunities to increase it as the budget makes its way through the legislature.

Gov. Hogan’s opening budget proposal is a signal that the power brokers in Annapolis understand how important hospitals are to Maryland’s communities, the state’s fiscal health, and the people who rely on them for care. That’s a good place to start from as we fight in Annapolis for other legislative actions that will help you meet your mission of care.