Good day from the Gold Dome!  Today, Lawmakers worked through more of the issues involving the State's Budget. 

In a jammed, packed hearing this afternoon, the House Appropriations Committee's Special Subcommittee on HB 307 members heard Governor Perdue's 2009 proposal, HB 307.  The Bill, carried by Rep. Jim Cole (R-Forsyth), has proposed to "provide for a fee to be imposed on hospitals to be used to obtain federal financial participation for medical assistance payments under Medicaid" and this fee would be deposited into a separately "segregated account within the Indigent Care Trust Fund." In the Governor's FY 2011 Budget, he has proposed implementing a 1.6 percent tax on hospitals and health maintenance organizations to help fill the Medicaid Budget.   

This Bill further would amend O.C.G.A. § 31-8-171(1) to provide for a new definition for the term 'care management organization' so that it will now mean an entity granted a certificate of authority under Chapter 21 of Title 33 "an entity offering an accident and sickness policy as defined in Code Section 33-29-1, and an entity operating as a preferred provider pursuant to Chapter 30 of Title 33 and which meets the definition found in 42 U.S.C. Sec. 1396b(w)(7)(A)(viii) as it exists on July 1, 2009; provided however, that the term shall not include a health benefit policy as defined in paragraph (1.1) of Code Section 33-1-2."  This change would permit the Governor to impose the managed care tax on all health maintenance organizations to further supply funds to fill the State's Medicaid "hole" in the Budget.  Hospitals and insurers were lined in droves to oppose this new "tax" and have repeatedly told lawmakers that the better tax to impose is an increase in the State's cigarette tax. 

More on the hearing is noted below. 

Senate 

SB 138, the initiative known as the "Transparency in Lawsuits Protection Act," came to the Senate Floor.  It provided that legislative enactments do not create a private right of action unless expressly stated. This initiative passed 45 to 3. 

SB 341, a revision to Georgia's HOPE laws, would require that a person be a legal Georgia resident in order to be eligible for a HOPE "GED" voucher. This Bill passed by a vote of 51 to zero. 

Sen. Buddy Carter (R-Pooler) proposed Georgia's annual "dangerous drug update," SB 353.  This Bill adds new controlled substances to the current listing.  It passed easily with a vote of 50 to zero. 

SB 50, Sen. Ralph Hudgens' (R-Hull) proposal concerning "rental networks" used by health insurance entities, came to the Floor.  This Bill has been hotly contested by the health insurers.  The Medical Association of Georgia has pushed this Bill.  It passed by a vote of 51 to one with two amendments (one increased a fine for an infraction of the law and the other gives physicians a private right of action) by Sen. Seth Harp (R-Midland) and now proceeds to the House.  

New Legislation 

HB 1218 – Rep. Jim Cole (R-Forsyth) joined with Speaker David Ralston (R-Blue Ridge), Majority Leader Jerry Keen (R-St. Simons Island) and Rep. Jay Roberts and proposed this Bill to enact the "Transportation Investment Act of 2010."  It deals with the powers and duties of the Department of Transportation and the responsibilities of the Director of Planning.  It also contains an allocation formula development and implementation of the State Public Transportation Fund (which would be under budgeting periods of ten-year increments).  The measure suspends restrictions on the use by public transit authorities of local sales and use tax proceeds (this would include MARTA and be for a period beginning January 1, 2010 and end December 31, 2012, with no restriction on the use of the proceeds of such taxes during that period). It provides for the creation of twelve "special districts" (which correspond with the boundaries of existing regional commissions (as created in O.C.G.A. § 50-8-4(f))) and a regional transportation sales and use tax for those districts (this tax would be at a rate of one percent – it would apply to sales of motor fuels and food and beverages).  The Bill has comprehensive revisions in Titles 32 and 50. 

HR 1432 – Rep. Allen Peake (R-Macon) offered this Constitutional Amendment to Article VII to create a new Section V to be known as "Sales Taxation for Local Purposes."  It would authorize the reduction or elimination of local ad valorem taxation for educational purposes with a sales and use tax at the rate of one percent.  Initially, this tax would be imposed for a period not to exceed four years and it would be in addition to any statewide and local sales and use tax.  There are some exceptions to this sales and use tax imposition – such as it would not be imposed on the sale or use of eligible food and beverages and it would not be applied to the production or generation of energy or sale or use of energy used in manufacturing or the processing of tangible goods primarily for resale. 

House Appropriations Committee – Subcommittee on HB 307 

In a hearing chaired by Rep. Mickey Channell (R-Greensboro), Lawmakers from the House Appropriations Committee heard loudly from their hospitals.  The hearing room's capacity far exceeded fire code requirements at many points; the final influx of persons occurred when the hospitals' "pink ladies" entered in droves.  Some of the presenters are noted below.  The constant theme was – do not tax the hospitals because of the adverse consequences including potential job losses; impacts to healthcare access; and added costs to the consumers.  Hospitals also stated repeatedly that the 16.5 percent rate cuts, in lieu of this "tax," would be devastating to patient care and was not an option for Lawmakers.  Instead, a resounding theme was to increase Georgia's tobacco tax to one dollar per package, generating $400-$600 million (and with federal funds, could draw down more than $1 billion). 

St. Joseph's Hospital of Atlanta remarked that this tax proposal in HB 307 and the FY 2011 Budget, over five years, would cost it $60 million – essentially the cost of the newly proposed Greensboro facility which St. Joseph's operates.  This facility's suggestion was to impose the tobacco tax as it would be a "win-win" proposal.  St. Joseph's was also opposed to the provider rate cuts, if this tax were not imposed.  Neither would work for the facility or consumers. 

The Alliance of Community Hospitals' representative, Julie Windom, told Lawmakers that her entity's hospitals understood their difficulties with the Budget but hospitals do not wish to bear the brunt of the Budget cuts or fixes. The proposed provider tax would be bad for patients and essentially be passed onto consumers or employers.  This tax would also be bad for the communities where these hospitals are located.  Ms. Windom reminded folks that the mission of a nonprofit is to reinvest into the community.  This tax could potentially be a cost of $250 million annually or the loss of 4,000 full-time positions.  The provider tax would also impair each hospital's ability to reinvest in new technology or the community.  Likewise, the proposed rate cut of 16.5 percent would also be passed onto consumers and cause a loss of jobs and decrease access to physicians.  The Subcommittee was reminded that Medicaid pays $.82 on each dollar; so, there is already a performance of services at less than cost.  Rather, Ms. Windom told the Subcommittee that the General Assembly should implement an increase on Georgia's tobacco tax of one dol1ar per pack.  There was already a history of the Generaly Assembly making tobacco-using Georgians pay for their healthcare with the State's implementation of the tobacco surcharge for those individuals who participate in the State Health Benefit Plan.  

Joe Fleming with the Georgia Chamber of Commerce also reminded the Subcommittee that hospitals had to take "all comers."  Implementation of this tax would impact negatively those individuals who are presently covered by private health insurance.  Costs would be passed to consumers, driving up the number of uninsured or adding more individuals to the State's Medicaid and PeachCare rolls.  He acknowledged that the "tax" would create winners and losers, but businesses will ultimately pay for this.  

Don Palmaissano with the Medical Association of Georgia also opposed the Bill, noting that the "bed tax" would be passed onto physicians and negatively impact patients' access to care.  Georgia already has a physician shortage; this change would only exacerbate the problem. Rather, the physicians urged the Subcommittee to support the tobacco tax as it will bring the necessary revenue to cover the Medicaid shortfall.  

The Georgia Dental Association's Martha Phillips also rose to oppose the tax and the provider rate cuts.  Her organization is composed of 3,400 dentists.  Their concerns, like other providers, were that the costs would be borne by the consumers and only further restrict access to care. Dentists have already been reeling from the implantation of the CMOs on the Medicaid program; they essentially only receive $.40 on each dollar rather than $.82 on the dollar.  Ms. Phillips urged that an audit be conducted of each of the CMOs and that the State should restrict the CMOs' administrative costs and profit to eight percent.  The CMOs apparently have administrative costs and profit in double-digit figures – much higher than the national average.  Ms. Phillips also urged the Subcommittee to require the CMOs to eliminate subcontractors.  The dentists believe that implementation of a tobacco tax increase is the way to resolve the current Budget issues. 

Like the Georgia Association of Health Plans and its opposition to the managed care tax proposal of 1.6 percent, Kaiser Permanente also opposed the tax.  In part, Kaiser Permanente reminded the Subcommittee that it was "unique" as it was both an insurer and a provider. Kaiser Permanente contracts with many of the metro Atlanta hospitals which have opposed the tax.  This managed care tax would disproportionately impact consumers and would only cause more to be added to the rolls of the uninsured and potentially "widen" the Medicaid hole.  As a fully insured HMO, this tax also disproportionately impacts Kaiser Permanente, which is a nonprofit entity.  This tax, if imposed, may encourage entities to self-insure their plans, which are governed by ERISA law rather than State law. As a nonprofit, Kaiser Permanente returned $20 million in community benefits to the community and this tax would be an additional cost on top of that requirement.  Kaiser Permanente urged the Subcommittee to look at the tobacco tax as a good alternative. 

House Health and Human Services 

HB 1154, authored by Rep. Sean Jerguson (R-Holly Springs) passed out of the Committee today with only one dissenting vote.  HB 1154 includes language which would allow for an inactivated virus to be administered by injection or a live attenuated virus administered by nasal spray by a pharmacist. However, no one under 13 years of age or over 49 years of age would be able to receive the live attenuated virus.   

House Regulated Industries Committee 

This afternoon it took up HB 863, the charitable solicitations Bill proposed by Rep. Katie Dempsey (R-Rome).  While the Committee heard testimony and asked questions about the regulation of donation drop-off centers, it desired to work on additional language and come back next week with a new Substitute on the proposal. 

House Committee on State Planning and Community Affairs' Subcommittee on Intergovernmental Relations 

Subcommittee passed out HB 1050, the Bill dealing with public-private partnerships known as the "State and Local Public-Private Act of 2010," unanimously and agreed to add a representative from the non-profit community to the new Board for promoting partnerships.  This Bill is authored by Rep. Wendell Willard and it is a part of the recommendations from the One Georgia Commission on Privatizations.