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Kansas Hospitals Push Back on Medicaid Cuts, Tax Hike

By John Commins  
   August 31, 2016

Providers air frustrations at a plan by Gov. Sam Brownback to nearly double a tax on inpatient revenues to offset the funding gap created by the governor's 4% cut to the privatized KanCare Medicaid program.

For obvious reasons, healthcare provider associations and lobbyists are a diplomatic bunch. They loathe public confrontations with elected state officials who can raise and cut taxes, and who control funding for Medicaid, which is one of the biggest items in any state budget.

So, it was unusual to see the Kansas Hospital Association last week offer a strongly worded criticism of Gov. Sam Brownback's proposal to cut Medicaid spending by 4%, and cover the hole by what would have to be the nearly doubling of a 1.38% assessment tax on hospital inpatient revenues.

"The governor seems to be saying that in order to reverse the 4% rate cuts, he is going to increase a tax on the very entities those cuts are hurting," KHA President and CEO Tom Bell said in an op-ed column offered to newspapers across the state.

"The governor's hospital tax increase, just like his Medicaid cut announcement, shows a lack of understanding of the interdependence of Kansas hospitals specifically, and the Kansas healthcare system in general. All hospitals are challenged by the Medicaid cuts and all hospitals will be even more challenged by an increase in the hospital provider tax. And, consequently, every community, large and small, will feel its effects."

Bell told HealthLeaders Media he wrote the op-ed piece because he was frustrated by a problem with an obvious solution.

The way hospitals see it, the governor has resorted to a convoluted scheme that robs Peter to pay Peter while forfeiting about $1.2 billion of Affordable Care Act dollars that would have been available if he expanded KanCare, the privatized Medicaid program that he created.

"We feel have been great partners with the state in trying to make our KanCare program work," Bell says.

John Commins is a senior editor at HealthLeaders.

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