An emergency rule to permit collection of an expanded hospital franchise fee was filed and signed by the governor, Director Corcoran of the Ohio Department of Medicaid told the Joint Committee on Agency Rule Review on the committee's request.

The emergency filing, Director Corcoran said, was needed because the budget recently agreed to by the conference committee includes a significant increase in revenue from the hospital franchise fee and there was not sufficient time to complete the usual JCAR rulemaking process. "The emergency rule was filed, signed by the governor for the hospital franchise fee," Director Corcoran said.

The move matters because the franchise fee is a broad-based tax charged to hospitals and, according to Director Corcoran, the majority of revenue generated historically flows back to hospitals "directly or indirectly," while some funds also support other priorities in the state budget. Corcoran said the department has begun the permanent-rule process with the Common Sense Initiative Office (CSIO) but used the emergency filing to ensure authority to begin collections immediately.

Committee members sought factual clarifications. Chairman Callender asked whether the rule is tied to the state budget action; Corcoran confirmed the filing was linked to the budget package being considered by the House and Senate and said the increase in the fee raises collections "just a little shy of the cap, as high as we are able to go." Representative Berner told the committee he had spoken with hospitals in his district, including Metro Hospital and the Cleveland Clinic, and reported those systems were pleased with the proposal.

Corcoran described how the distribution formula was adjusted to target extra support for obstetrics, rural hospitals and behavioral health providers in response to concerns raised by hospitals and the governor's office. "We wanted to target a little bit of extra attention in the areas of obstetrics, the rural hospitals, as well as behavioral health," Corcoran said.

Committee members did not take formal action at the meeting; they reviewed the filing and asked questions. Chairman Callender confirmed the department's permanent rule filing to CSI is identical to the emergency rule and said the agency will proceed through JCAR's usual timelines for permanent rulemaking.

Details provided by department staff at the hearing included that the emergency filing is intended to permit immediate collection of the fee, that the department has initiated the permanent-rule process with CSIO, and that the conference committee report was pending concurrence votes in the House and Senate. The committee did not set a follow-up action requesting further votes or approvals during the session.

The department said it will continue the permanent-rule process through the Common Sense Initiative and JCAR, and members indicated they would monitor the rule filing as it proceeds through those channels.