Sovah Health requesting Danville tax the hospital

Tax would allow hospital to get additional Medicaid funding

DANVILLE, Va. – Millions of dollars.

That's how much health care Sovah Health CEO Alan Larson says the hospital spends annually that isn't paid for by the people receiving the care and that's why the hospital is asking to be taxed by the city.

"This tax is an opportunity for the hospital to get access to some money that was set aside by the federal government to provide compensation," Larson said.

The hospital is estimated to be eligible for about $6 million.

In order to get the money, the state would have to pay 50 cents for every $1.

The state isn't willing to pay, so the hospital is offering to pay in the form of a tax.

"The city becomes the vehicle of getting this money to the Virginia Department of Medical Assistance Services, which then matches that money with some federal money that's available and then we receive that money back," Larson explained.

At Tuesday night's Danville City Council work session, City Manager Ken Larking said how much the hospital would be taxed and what, specifically, would be taxed hasn't been decided.


"The tax is something that they plan on paying themselves. It's not anything that's going to be passed along to a customer," Larking said.

The tax would be evaluated every year.

City Council will have to adopt a resolution and may have to also change the city's charter to collect the money from the hospital.

If a resolution is adopted, it will go before the General Assembly next year for approval.

"The resolution is in draft form. Likely, it will go on to the next City Council agenda for consideration," Larking said.

If the resolution is approved, the hospital should receive its federal funding sometime next year.