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Governor Wolf’s 2018–2019 Budget Sustains Hospital Funding, Work on Reauthorization of Hospital Quality Care Assessment to Begin

February 06, 2018

Today, Governor Wolf introduced his proposed state spending plan for the 2018–2019 fiscal year. The budget maintains 2017–2018 funding levels for hospital payments, including the Medical Assistance Supplemental payments for critical access hospitals, obstetrics/neonatal payments, hospital burn centers, and trauma centers.

“Today Governor Wolf introduced a budget plan that provides continued support for vital hospital funding lines, including obstetrics and neonatal intensive care units, critical access hospitals, and trauma and burn centers. Without access to these facilities, Pennsylvania’s most vulnerable patients, and those with emergent and complex medical conditions, would be left with few options to receive the care they need,” said Andy Carter, president and CEO of The Hospital and Healthsystem Association of Pennsylvania. “We thank Governor Wolf for prioritizing these programs and we thank the legislature for their ongoing support of these funds.”

In addition to the specific line item appropriations found in the state’s General Fund, the Governor’s budget also includes assumptions related to the reauthorization of the statewide hospital Quality Care Assessment (QCA).

Since 2010, Pennsylvania hospitals have been taxed in order to generate additional state revenue and to increase funds available for hospital Medicaid payments. The Governor’s budget seeks to increase the commonwealth’s share from the Hospital QCA from $220 million to $350 million––an approximately 60 percent increase ($130 million) over the current year amount. 

“We look forward to working with our legislative hospital champions and the administration to continue a QCA program that supports the commonwealth, but also ensures that our hospitals are not unduly burdened by the state portion of the assessment,” said Carter. “It’s imperative we strike a balance so that hospitals have the resources to provide Pennsylvanians with the right care, in the right place, at the right time.”

The proposed budget also continues to invest additional state and federal funds to help address Pennsylvania’s opioid crisis.

“Each and every day, hospital staff see first-hand the toll that the opioid crisis is taking on the commonwealth’s families. We know that there are no easy solutions to ending substance use disorder in Pennsylvania, and hospitals are working to implement prescription guidelines, to streamline patient access to recovery services, and to strengthen our partnership with state and local governments to prevent substance misuse,” Carter said. “We appreciate Governor Wolf’s ongoing efforts and we will continue to advocate for increased behavioral health funding and services that are crucial to putting Pennsylvania on a path to recovery.”

The Governor’s budget proposal also reflects a continued commitment to unify the Department of Health and the Department of Human Services (DHS) into a single state agency. In speaking to stakeholders after the Governor’s budget address, acting DHS Secretary Teresa Miller said the focus of this initiative is to foster greater collaboration and coordination between the commonwealth’s primary payer of health care with its primary authority on public health.

The Governor’s proposed $32.9 billion budget is a $1 billion increase over last year and does not include any broad-based tax increases. Unlike last year’s significant revenue shortfall of $1.5 billion, the commonwealth is currently projecting a $40 million surplus.

Similar to past years, the Governor is also proposing a severance tax on natural gas estimated to bring in $248.7 million and a plan to increase the minimum wage to $12 per hour.

The legislature will begin their review of the Governor’s budget through the respective appropriation committee budget hearings beginning the week of February 19. 

HAP will monitor the legislative hearings and continue its review of the Governor’s proposals with additional analysis in the coming weeks.

For additional information, please contact, Scott BishopJeff BechtelJolene Calla, or Stephanie Watkins.

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