March 10, 2008 10:36AM

Pennsylvania Proposes to Defraud Non‐​Pennsylvanians

From an article in the Pittsburgh Post‐​Gazette:

Pennsylvania hospitals and other medical providers often seek higher state reimbursements for treating low‐​income, elderly and disabled people under the state’s Medical Assistance program. Now the state Department of Public Welfare has come up with a new tax idea that would make higher payments possible by placing an “assessment” on the profits of general hospitals in two counties, Allegheny and Philadelphia…

Public Welfare Secretary Estelle Richman … said that such a levy on net patient revenues at acute care hospitals in the state’s two largest counties would have two benefits: it would increase state Medical Assistance payments for services to the elderly and poor, and would also enable health providers to get higher federal Medicaid reimbursements, which rise as state payments rise…

DPW spokeswoman Stacey Witalec … said the proposed hospital assessment “is similar to other assessments we already have in place,” such as ones on nursing homes. “The basic model is to increase the amount of federal match [funds] that we receive to support our Medical Assistance program,” she said. Other states have such hospital assessments in place, she added.

In other words, Pennsylvania pretends to give its hospitals higher Medicaid payments. Based on those “higher” payments, the Commonwealth pulls down additional “matching” federal Medicaid dollars — which is a fancy way of saying it takes money from taxpayers in other states. Then, Pennsylvania taxes back the money it pretended to give its hospitals. Thus the federal Medicaid program allows Pennsylvania to siphon money away from other states.

That sound you hear is your pocket being picked.