HARRISBURG -- 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.

The "assessment on net patient revenues," as state officials call it, was limited to those two large counties because the DPW says that's where the majority of Medical Assistance patients are located and treated.

While the additional revenue would come only from hospitals in Allegheny and Philadelphia, the money would be spread around to Medical Assistance providers, including hospitals, in all 67 counties, the department said.

The tax idea drew criticism yesterday from some Allegheny County Republican legislators.

"I don't support taking money from hospitals in my region" and giving it to the state "only to redistribute it around the state," said Sen. Jane Orie, R-McCandless. "Because the assessment is only on selected hospitals, it would put them at a competitive disadvantage with other hospitals in the state."

"This isn't an assessment, it's a new tax, there's no doubt about that," said Rep. Mike Turzai, R-Bradford Woods, a frequent critic of Democratic Gov. Ed Rendell's administration.

Public Welfare Secretary Estelle Richman floated the "assessment" idea during a Senate hearing this week on the state's proposed fiscal 2008-09 budget, which takes effect July 1.

She 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.

"We have met with key leaders in Pittsburgh already in February for preliminary discussions,'' DPW spokeswoman Stacey Witalec said yesterday. "The next round of talks are underway.''

She didn't say how Allegheny hospitals were reacting, but the Hospital & Healthsystem Association of Pennsylvania told Capitolwire, a Harrisburg-based online news service, that it was opposed to the proposed tax.

Officials at the University of Pittsburgh Medical Center declined to comment on the proposal.

Mrs. 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.

Under federal law, an assessment on hospitals can't exceed 5.5 percent of their "net patient revenues." If the DPW plan goes ahead, the actual tax rate would have to be negotiated between hospitals, legislators and officials from the two counties.

Action by the Legislature would be needed to grant the counties the authority to assess such a tax and also to permit nonprofit hospitals to be taxed.

Ms. Orie said she didn't see support in the Legislature at this point. She said it appears the idea would "violate the uniformity clause of the state constitution'' because the tax would affect only two counties.

But department officials said the tax would be assessed locally, by each of the two counties, and so it wouldn't violate the uniformity clause.