Oregon legislators will consider in this session an increase in the hospital tax that is currently scheduled to sunset in September 2009. The tax is the sole source of funding for the Oregon Health Plan’s Standard population.

The Governor’s 2009-2011 Recommended Budget includes a provider tax of 4% on the net revenue of 25 Oregon hospitals; hospitals with fewer than 50 beds would be exempt from the tax. In early March, senior managers from Mercy Medical Center met in Salem with legislators and healthcare policy staff to discuss our concerns about the hospital tax, as well as a possible solution.

Because the state has the opportunity to use hospital tax dollars to secure an additional $1 billion in federal matching dollars to help cover the uninsured in Oregon, we do believe some version of a hospital tax will be approved by the Legislature. Therefore, we would like to share our position on the matter.

Mercy would be supportive of the new tax if the following occurs:

The Provider Tax is used to maximize federal matching funds for the Oregon Health Plan;
 
and

The hospitals paying the tax receive these dollars back (or return excess if they receive it) through reimbursement or another process;
 
and

The provider tax is linked to the availability of federal funding and used exclusively for continued coverage for the OHP-Standard population (essentially if the federal match goes away, the provider tax goes away);

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