SOMC Says Preparations Made for Hospital Taxation

The Ohio Legislature recently passed the 2010–11 state budget bill that will affect Ohio’s hospitals. Gov. Ted Strickland signed the bill into law Friday, July 17.

The bill states that all Ohio hospitals will be assessed a 1.52 percent tax in 2010 and 1.61 percent in 2011. Southern Ohio Medical Center will be required to pay more than $4.9 million in taxes over the two-year span.

“We have been proactive in anticipation of this bill,” SOMC President and CEO Randy Arnett said. “We began, earlier this year, taking into consideration that we would need to make reductions in expenses to meet these state requirements. Because of this, our budget has allowed for this expense from the state.”

In addition to the taxation to Ohio hospitals, the bill also allows for a 5 percent increase in Medicaid reimbursement and supplemental Medicaid payments for inpatient and outpatient services. This will go into effect Oct. 1.

“We will receive an additional $1.8 million in reimbursement from Medicaid. However, we will still have a total cost of $4.2 million that we will pay to the state in total,” he said.

Arnett said the organization expected changes from the state, but the cuts are more than anticipated.

“SOMC will meet the budget set earlier last month. However, we will have to work diligently to overcome this additional lower reimbursement,” he said.

Arnett explained that this doesn’t mean that the economy won’t change and that SOMC is clear of any further loss, but that the organization is always looking ahead.

“We will continue to work hard to overcome this setback and put the needs of our patients and employees first,” he said.

To learn more about this new state budget bill, visit the Ohio Hospital Association online at www.ohanet.org.