Sovah Health requests local provider fee from Danville City to support expanded access to Medicaid

May 17, 2019

Sovah Health is asking Danville City to pursue an opportunity to implement a local provider fee on Sovah Health. The fee revenue collected by the City of Danville will be used in combination with federal matching funds to support the continued access to quality hospital care to individuals qualifying under the Commonwealth of Virginia’s Medicaid program. 

Sovah Health and its campuses – Danville and Martinsville - meet the federally approved safety-net criteria necessary to qualify for additional Medicaid payments under Virginia’s Medicaid State Plan. However, the Medicaid program is a shared fiscal responsibility between the states and federal government. As such, the safety-net hospitals eligible for payments (including Sovah Health) must find a permissible source of funding to serve as the Commonwealth’s “share” of the additional Medicaid payments. 

One opportunity to generate a permissible source of funds is through the establishment of a local hospital fee, whereby the City of Danville would impose a fee on Sovah Health that could be used to cover the Commonwealth’s share of the additional Medicaid payments. The fee would be collected from Sovah Health. The City will transfer the fee revenue to the Department of Medical Assistance Services (“DMAS”), which is the agency responsible for administering the Commonwealth’s Medicaid program. DMAS would use the fee revenue and corresponding federal matching funds to make the additional Medicaid payments to Sovah Health.

This local hospital fee program is time-limited and will be evaluated on an annual basis to ensure Sovah Health receives all additional Medicaid payments for which it qualifies under the Commonwealth of Virginia’s federally approved Medicaid State plan. Under no circumstances will Sovah Health pass any portion of the cost of the fee onto the patients it serves.