Forty-three Mississippi hospitals, in conjunction with the Mississippi Hospital Association, today filed a lawsuit in Hinds County Chancery Court against the Office of The Governor and the Division of Medicaid, requesting injunctive relief and asking the court to declare unconstitutional a tax on hospital gross revenues levied by Governor Haley Barbour.
A fundamental principle of the Mississippi Constitution is that only the legislative branch of government can levy taxes. Barbour’s levying of the tax oversteps the constitutional authority of the executive branch. The lawsuit was filed after over four months of lengthy negotiations regarding the many alternatives the state has to fund the program.
The tax, if allowed to go forward, will impose an extreme burden on many Mississippi hospitals. In some instances, the tax will be greater than the total annual operating margin of the hospitals. The Governor’s tax plan allows Medicaid to levy up to a 1% tax on the gross revenue of our state’s hospitals. This represents more than $90 million in additional costs imposed on hospitals. The additional tax burden will require many hospitals to lay off employees and cut valuable services.
"This lawsuit was necessary not only to protect the constitutional rights of Mississippi hospitals, but also to protect the financial integrity of our state’s health care system,” said Sam W. Cameron, President/CEO of the Mississippi Hospital Association.
If you think health care costs are soaring now, just let this legislation pass! This will close the doors on many smaller rural hospitals that are barely surviving now. Hospitals don't get rich serving Medicaid and indigent patients in the Mississippi Delta.
Both public and private hospitals donate hundreds of thousands of dollars each year in "free care" to patients that have no payor source. That debt goes right to their bottom line. So Haley's solution to cover the ever-growing Medicaid debt is to simply tax our hospitals to death... literally.
As stated above, the Governor is not granted the power to levy taxes under our state constitution. It is a sad state of affairs when our own health care facilities have to bring suit against the Governor of our state to prevent his wanton misuse of power.
The solution to this problem is not to throw good money after bad, but to seek legitimate reform of the gross waste and corruption that exists in our current Medicaid system. If you feel strongly about this issue, please let your senators and representatives know that "Haley-Care" is not the answer!