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Tough Economy Could Significantly Impact ASCs in More than One Way

The tough economic times facing Ohio will certainly hold a significant financial impact for ASCs and other health care providers as more Ohioans lose health care benefits or have those benefits reduced to cut costs. While it's certain that most ASCs as planning for these potential reimbursement impacts to their 2009 budgets, there are other government-related "costs of doing business" that could also affect the budget next year and beyond.



The economic news in Ohio just keeps getting worse as the state Budget office recently released figures that show state revenues for FY09 are now running nearly $138.4 million below estimates - estimates just revised in September. These figures do not include the sales tax revenue from "Black Friday" although that is the category showing the largest shortfall -- $74.6 million for the fiscal year so far and nearly $33 million for November alone.


As a result, the governor released a "worst case scenario" view of the 2010-2011 state budget which could result in a 25 percent cut in all agency funding levels.


As the brand new legislature and Governor try to deal with this monumental budget hole, one area that might see some attention is the revenue side. While no one is publicly advocating tax increases there is a possibility that lawmakers might try to tap the newly enacted Commercial Activity Tax for additional revenue. Designed to be very low rate and a broad-based, this tax could be the first place legislatures look to increase state revenue, especially in the Democrat-controlled House.  An adjustment up in the tax rate could yield significant additional revenue and more taxes for already strapped Ohio businesses including ASCs.



An additional area of concern could be increases in various fees for permits, licenses and inspections.


These are always prime areas for increases during tough economic times. 


By increasing these fees instead of taxes, politicians can say that they balanced the budget without increasing taxes.  Nonetheless, it potentially is still an additional cost to your ASC.



Yet another budget line item to watch is unemployment compensation insurance paid to the state.


Not only is Ohio's fund to help unemployed workers facing a $28 million deficit by the end of the year, but it could reach nearly $2.5 billion by 2011 and more than $3.2 billion by 2016.


The state will be asking the federal government for assistance with the fund through loans, but Ohio employers will need to foot the bill to repay those loans and stabilize the system in general.


This will likely mean significant additional unemployment compensation insurance bills in the very neat future.



Fortunately, the state's workers' compensation fund has remained pretty stable in recent months and the BWC has even moved to further reduce premiums for employers.  

However, as businesses continue to close and the markets continue to decline, workers' compensation premiums are an area to key an eye on.



Unfortunately, the economic outlook for near future doesn't seem promising and the impact on businesses could be significant. According to the Ohio Society of CPAs' annual Ohio Business Poll, a majority of CPAs participating in the survey do not believe a sustainable economic recovery will occur until the last half of 2009 or the first half of 2010. The best advice is to plan accordingly and ensure that all contingences are accounted for.


Remember, the OAASC will keep you informed on all changes to taxes, fees, premium rates and regulations that might impact your center.  Watch your emails for special alerts and e-Bulletins and rest assured that we are working in Columbus to ensure that the impact of any governmental changes to Ohio ASCs will be held to a minimum.

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