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Committee hears bill to expand provider tax to boost Medicaid hospital payments
Summary
Senate Bill 848 would expand the hospital provider tax base to generate additional Medicaid directed payments to hospitals; hospital leaders, union and health system officials supported changes, and the committee moved to hold the bill.
Senate Bill 848, introduced by Senator Whip Dekoyan, would increase funds available through the hospital provider tax and use the state’s Medicaid financing mechanism to expand managed‑care directed payments to hospitals. Backers said the change would not raise state taxpayers’ net share but would draw additional federal matching funds to shore up hospital finances and improve access to care.
"For every $1 that the State of Rhode Island contributes to the current hospital provider tax, Rhode Island can draw down approximately $2 in federal matching funds," Senator Dekoyan said in opening remarks, urging committee support. He said the bill would strengthen hospitals facing workforce shortages, overcrowded emergency departments and reimbursement shortfalls.
Lisa Tommaso of the Hospital Association of Rhode Island told the committee SB 848 would produce roughly $30 million in additional tax revenue that, when matched with federal funds, could generate nearly $100 million in additional managed‑Medicaid directed payments to hospitals. "These funds help close this long‑standing gap between the cost of care and what Medicaid reimburses," Tommaso said. Howard Delude, interim president of the Hospital Association, Maria Ducharme, president of The Miriam Hospital, and Dr. Pari Gopala Krishnan of Kent Hospital echoed concerns about inadequate Medicaid rates, capacity pressures and workforce shortages.
Patrick Crowley, president of the Rhode Island AFL‑CIO, testified in support on behalf of health‑care workers, saying higher Medicaid payments to hospitals can help stabilize jobs and reduce strain on staff. Committee members asked whether changes at the federal level could reduce the matched funds; witnesses acknowledged that federal match levels could change but said at least some match would remain and the program remains the most effective lever to increase hospital funding without a direct increase in state general revenue.
After testimony, the committee voted to hold SB 848 for further study. The motion to hold was made by Vice Chair Laurier and seconded by Senator Jafusa; the committee recorded the motion as carried by voice vote.
