A bill that continues provider fees for hospitals in order to shore up Medicaid becomes the first bill signed into law this session.

Gov. Nathan Deal signed the measure, that some refer to as a “bed tax,” at the annual meeting of the Georgia Hospital Association in Buckhead.

It gives the authority to levy the fee to the Department of Community Health which already assesses similar fees to nursing homes in the state.

The provider fee was established in 2010 as a way to draw federal dollars to those hospitals that treat a large number of Medicaid patients.  The fee is based on a percentage of a hospital’s net revenue. 

The current fee ends in June and without the bill, the state would have had to find $700 million to fill the hole.

“The anticipated affect we would have seen hospital reimbursements reduced by about 20 plus percent and that would have been devastating,” Deal told reporters after he signed the bill.

He says as many as 10 rural hospitals could have faced closure without it.