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New Small Hospital Tax Signed Into Law

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MADISON, Wis. (WTAQ) - Nobody likes to pay taxes. But Wisconsin’s smallest hospitals were happy to be hit with a new tax Monday, because it will net them almost twice as much as what they pay. Governor Jim Doyle signed a bill that imposes the state’s one-year-old hospital tax on 59 institutions with 25 beds or fewer. They’ll pay in a total of $10.6 million a year – and they’ll get back an extra $18 million to treat poor and elderly patients in the Medicaid program. That’s because of the way the reimbursement system works for the state and federal Medicaid program.

Officials say it’s a big boost for Medicaid programs – and part of the revenue is set aside to encourage doctors to locate in rural areas by paying off part of their medical school loans. Eric Borgerding of Wisconsin Hospital Association says the tax has really helped larger hospitals. And about half the smaller hospitals barely break even, run with a loss.

Tim Size of the Rural Wisconsin Health Cooperative said it was a “no brainer” to get small hospitals to pay the new tax. He was glad it did not become a partisan battle in the Legislature, although some lawmakers were opposed. The new tax passed the Assembly 60 to 38, and the Senate 22 to 11.

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