Happenings on the Hill
PA Budget Passes On Time.
One revenue enhancer includes a 34% increase of
$75 million in an assessment of hospitals.
The past few years have not gone smoothly in Pennsylvania when it comes to
budgets. Since Governor Tom Wolf took office in 2015, not a single state budget
has been passed before deadline and no budget plan was signed by the Governor
himself.
This year, the Republican-controlled legislature and Governor Wolf (D) agreed on a budget plan and passed it a week
before the end of the June 30 fiscal year. The $32.7 billion is a slight increase over last year, with the majority of money
going to schools, pensions, prisons, and human services.
Although the budget does not include taxes for individual tax payers, it does include a $75 million increased in an assess-
ment on hospitals. Andy Carter, president and CEO of The Hospital and Health System Association of Pennsylvania,
came out against the increase stating, “We cannot let the needs of the general fund rob the hospital community’s poten-
tial to invest in health care” (Murphy, 2018, para. 7).
The 2010 Quality Care Assessment established that each hospital in the state would be assessed quarterly based on net
patient revenues. After the state collects the assessment, it takes its money earmarked for the general fund. The remain-
ing amount is funds Medicaid payments to hospitals, which are matched by federal dollars. The assessment started at
2.95% and has increased to 3.71% in the 2018-19 budget. Carter noted that “too large of an increase ... would create un-
certainty and instability ... would make long-term and strategic planning nearly impossible” (Barstow, 2018, para. 18).
The Pennsylvania Healthcare Cost Containment Council (PCH4) 2017 annual report on the financial health of Penn-
sylvania’s hospitals and surgery centers included net patient revenue, total and operating margins, and other aggregate
data. The report stated that hospital revenue increased by 3.9%. Statewide net patient revenue was $46.3 billion, which
made up 95% of statewide hospital operating revenue. As a result of the ACA, uncompensated care decreased from
2.01% in 2016 to 1.74% in 2017 (or $844 million to $761 million in FY 2017). Overall, statewide hospitals realized a
.66% increase in revenue.
The passing of the budget, combined with an election year, means that legislators have returned to their districts to
work on constituent issues. The legislature will be in session for one week in September and one week in October. After
the November election, the remainder of the year will be dedicated to changing the guard, moving offices in the Capitol,
and committee assignments.
Barstow, T. (2018, June). Pa. budget
raises assessment on hospitals. Central
Penn Business Journal. Retrieved from
http://www.cpb j.com/article/20180625/
CPBJ01/180629942/pa-budget-raises-
assessment-on-hospitals
I believe the hospitals remain in good financial stead
as evidenced by the number of hospitals and health
systems investing in building new facilities to meet
the need of communities.
PSNA CEO Betsy M. Snook
Murphy, J. (2018, June). What
will Pa.'s $32.7 billion budget buy?
PennLive. Retrieved from https://
www.pennlive.com/expo/news/erry-
2018/06/0823a0425c5604/inside_pas_327_billion_state_b.html
Issue 73, 1 2018 Pennsylvania Nurse 3