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February 3, 2013

Ga. House adopts Medicaid financing fix

ATLANTA — Gov. Nathan Deal scored a key budget victory as the House of Representatives approved his plan to avoid losing more than $450 million in federal money for the Medicaid insurance program.

The 147-18 vote sends Senate Bill 24 to Deal's desk for his certain signature, and it completes a two-week whirlwind for an issue that once promised to dominate the General Assembly's session as lawmakers sought to avoid steep health care cuts without explicitly voting for a tax.

The measure will allow an appointed state board to levy a tax on Georgia hospitals' net patient revenue with the money being used as state match to qualify for federal Medicaid support. That structure will replace an existing tax that the Assembly imposed in 2010 amid sagging revenues wrought by the Great Recession. That levy expires June 30, the end of the state's budget year.

Both concepts reach the same end: parlaying Georgia health-care money into even more money that is plowed back into the same system through higher payments for treating Medicaid patients. Deal and legislative leaders pitched the vote as an absolute necessity.

"This was a tough vote today, but our members did the right thing," House Speaker David Ralston said.

Georgia's Medicaid program serves more than 1.5 million people at a cost of about $5.8 billion to federal taxpayers and $2.6 billion to the Georgia treasury. Most of the beneficiaries are children, elderly adults or disabled adults from low-income households.

With the current scheme accounting for about 8 percent of the program, legislators came into their annual session under competing pressures.

The hospital industry, physicians and other health-care providers wanted some kind of extension of the existing tax — which is 1.45 percent of net patient revenue — to prevent Medicaid payment cuts to local hospitals and physician practices. But anti-government activist and national GOP powerbroker Grover Norquist publicly urged lawmakers not to extend the tax.

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