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Pa. hospital association says Wolf’s proposed tax hike would hit hard

HARRISBURG — Gov. Tom Wolf’s proposed state budget includes an 18 percent tax increase on hospitals and would cut funding for burn centers and maternity-related services by $4.1 million for Western Pennsylvania hospitals, the president of a statewide hospital association said.

Across Pennsylvania, a tax called the Hospital Quality Care Assessment would increase from 3.22 percent to 3.8 percent without a corresponding return of those dollars to hospitals, said Andy Carter, president and CEO of The Hospital & Healthsystem Association of Pennsylvania.

The assessment was established in 2010. The association agreed to it at that time because hospitals received added Medicaid payments, Carter told the Tribune-Review during a state Capitol visit.

Under Wolf’s proposed budget, hospitals would absorb cuts of $36.5 million — $17.5 million in state money and $19 million in federal funds — to Medical Assistance supplemental payments for burn care centers, obstetrical and neonatal care units, and rural critical access, according to association figures.

In nine Western Pennsylvania counties, the elimination of obstetrical unit funding would cut about $1.3 million; burn centers’ funding would decline by $2.8 million. The southwestern part of the state does not have critical-access hospitals so that is not a factor, said association spokeswoman Katie Byrnes.

Wolf spokesman Jeffrey Sheridan said the governor’s budget “does not cut payments to hospitals when considering funding from all sources.”

Wolf is implementing Medicaid expansion under the federal Affordable Care Act.

“Increased federal reimbursements, as a result of opting in to Medicaid expansion, will likely exceed any reductions for state-funded programs,” Sheridan said. “Additionally, Medicaid expansion will benefit hospitals by significantly expanding access for medical services, further reducing emergency room visits and providing increased revenue for hospitals in Pennsylvania.”

Sheridan said elimination of funding for supplemental payments to burn centers and maternity services is not unprecedented.

“As we are in budget negotiations, the restoration of these funds will likely be discussed as the process continues,” he said.

Nine counties make up the combined $4.1 million cut, according to the association: Allegheny, Westmoreland, Beaver, Butler, Armstrong, Indiana, Washington, Greene and Fayette.

A budget impasse hits its 29th day Wednesday. Wolf, a Democrat, and the Republican-controlled Legislature are in a standoff over higher taxes sought by Wolf and his request for more spending than Republican lawmakers favor.

Wolf on June 30 vetoed a $30.1 billion budget that did not increase broad-based taxes such as sales and income taxes. The Wolf administration claims the GOP plan underfunds public education. House Speaker Mike Turzai, R-Marshall, said this week that there isn’t enough support in the House to approve Wolf’s budget.

Carter said the hospital association supports the vetoed Republican budget.

Under that budget, the 3.22 percent tax would increase by 9 percent — half of the increase Wolf proposed — but money from the increase would be returned to hospitals, Carter said.

The association advocates for nearly 240 Pennsylvania hospitals, patients and communities the hospitals serve, Byrnes said.

Brad Bumsted is Trib Total Media’s state Capitol reporter. Reach him at 717-787-1405 or [email protected].


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