Impact of proposed hospital revenue tax uncertain for hospitals

State legislators have proposed tax to help fund Medicaid

MARTINSVILLE, Va. – Hospitals like Sovah Health are paying close attention to Medicaid expansion negotiations in Richmond.

A proposed hospital tax to help fund Medicaid expansion across the Commonwealth makes it hard for them to plan their future.

"Whenever there's any element of uncertainty, that definitely is difficult for us to kind of think about short-term and even long-term planning," Sovah Health Marketing Director Liz Harris said.

She said the hospital is still trying to figure out what impact a tax on hospital revenue would have.

"From a local and specific impact for our hospitals and communities, we aren't sure," Harris said.

Under the current version of the proposal, 69 hospitals in the Commonwealth would be subject to the tax.

Hospitals not owned by private companies, children's hospitals, and rehab and long-term care hospitals would be exempt.

According to the Virginia Hospital and Healthcare Association, estimates suggest the tax would generate more than $400 million a year for the state to help fund Medicaid.

"The Virginia Hospital and Healthcare Association does a great job of helping us stay connected to what's going on in Richmond," Sam Gerstemeir, external affairs director for Centra Hospital in Gretna, said.

Despite the current uncertainty, he is confident the hospital will be able to adapt to whatever happens.

"We have complete confidence we will be able to move forward in a proactive manner once any proposals are finalized," Gerstemeir said.

If the proposals are approved, they are expected to take effect Jan. 1, 2019.

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