Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 7, 1992 TAG: 9202070238
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: ROB EURE Staff Writer
DATELINE: RICHMOND LENGTH: Medium
CRANWELL BLASTS HOSPITALS
A senior Western Virginia legislator exploded in frustration Thursday over health-care officials' staunch opposition to a tax on the industry and unwillingness to work with legislators to find an alternative."You're probably the most profitable industry in the country and there's no `give' in you," House Finance Chairman Richard Cranwell, D-Vinton, told medical industry officials during a meeting with his committee.
Later in the day, however, hospital lobbyists said they had proposed a compromise to the Wilder administration.
Laurens Sartoris, president of the Virginia Hospital Association, had declined to answer Cranwell in public. But hours later, he suggested that "we could reach an agreement" and that he had put one on the table, only to have it rejected by the administration.
But state officials say no real offer was made.
In lieu of Gov. Douglas Wilder's tax to raise $60 million for the rapidly rising Medicaid budget, the hospitals want the state to lower its budget for Medicaid costs. In return, the industry would provide free care if those costs exceeded the budget, Sartoris said in an interview.
Health and Human Resources Secretary Howard Cullum said the hospitals may have made passing reference to the proposal in a private meeting Wednesday, but provided no specifics.
Under the hospital plan, the administration would drop the tax proposal and reduce its projected cost for Medicaid by a so-far-unspecified amount. If costs exceeded that, the medical industry would deliver the additional services free, Sartoris said.
Cullum asserted that when administration officials met with health-care representatives in December, "I offered exactly that," but medical industry officials rejected it.
Cullum said now he wants to see a firm proposal.
"There are some concerns about who pays if there is a deficit," Cullum said. "We also would need to make sure that people would actually be able to get the care they are entitled to. But nobody is sticking their feet in concrete saying we're not moving."
At an early morning meeting of the House Finance Committee set by Cranwell to try to force a compromise, medical industry officials were firm in their resolve against the tax.
They suggested that the state adopt a plan for better-managed care for Medicaid recipients similar to one in use in Kentucky. Allen Goolsby, representing the Medical Society of Virginia, said the plan could conservatively save $35 million in the next two years.
Cullum applauded the idea, but said the system would take too long to set up to save much money in the state's two-year budget. He estimated a savings of $5 million to $10 million.
Cranwell, fuming at the continuing impasse, suggested two solutions of his own: one to raise the fee doctors would be charged from $200 to $250 annually, and another to eliminate the sales tax exemption that non-profit hospitals now enjoy on equipment purchases.
Then, turning to a representative of nursing homes, Cranwell said "I'm trying to figure out how to get a shot at you. I'm not sure yet, but I've got a week to think about it."
Cranwell reminded the health lobbyists that Norfolk Southern Corp. had accepted deferral of a tax break to help state government meet the recession for the past three years.
"That's good citizenship," Cranwell said, staring at the medical lobbyists. "You all are supposed to be people healing the sick, compassionate people, but you don't want to do anything" to relieve state budget pressure over rising Medicaid costs.
Cranwell's plans were met with no more warmth in the industry than was Wilder's tax plan.
But his outburst illustrated the growing frustration in the General Assembly over the Medicaid issue and the $60 million hole it could create if Wilder's tax is defeated, as some legislators expect.
Time is running short for the legislature's money committees to settle the issue. The deadline for voting on tax bills is next week, with votes on the budget scheduled a few days later.
Although some senior legislators said they believe the votes are there to kill taxes on the health-care industry, Cranwell said he is "reasonably confident I can get something out of this committee."