July 19, 2011 in News

Hospitals sue state over Medicaid cuts

By The Spokesman-Review

The Washington State Hospital Association (WSHA) has sued the state for cutting Medicaid payments.

The lawsuit filed Monday claims that the Legislature raided money from a dedicated fund to help pay medical bills accrued by the poor and instead will route the money into the state’s general fund.

WSHA said the move creates an unconstitutional tax on hospital patients. The suit, filed in Seattle, outlines a special assessment the Legislature approved in 2010 to collect $200 per day per hospital patient. The money would be matched by federal funds and together would help stabilize Medicaid funding for hospitals and award the state extra cash to help alleviate last year’s budget crunch.

Then this year, the Legislature, facing more budget shortfalls, cut the Medicaid payments to hospitals but kept the assessment in place, using the money to preserve program and ease deeper cuts.

WSHA alleges this action turned the assessment into an illegal tax. It has asked a King County Superior Court judge to restore the Medicaid funding to hospitals as originally designed in 2010, or stop collecting the assessment.

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