March 11, 2010 -- NASHVILLE -- The Greater Memphis Chamber endorsed a one-year, 31/2 percent fee on hospitals statewide Wednesday to help offset a big funding cut that threatens the the Regional Medical Center at Memphis and other safety-net hospitals with closure.

Chamber executives asked the Shelby County legislative delegation to support an "enhanced coverage fee" proposed last month by the Tennessee Hospital Association. The fee would be levied on net patient revenue at most but not all hospitals. The Med, St. Jude Children's Research Hospital and Le Bonheur Children's Medical Center would be excluded.

It would raise $230 million, which would be used to draw down $430 million in federal Medicaid money. The total $660 million would help offset damage to hospitals that the THA says will result from a $1.2 billion cut in TennCare proposed in Gov. Phil Bredesen's budget.

The Med and similar hospitals would receive some of the proceeds. The hospital has warned that if its $50 million share of the TennCare cuts goes through, it would put it in danger of closure.

That danger triggered the chamber's support for the THA fee, said Dexter Muller, the Memphis chamber's senior vice president for community development.

"The Med ... is important to all of our community. The business community is behind it. The THA has proposed a solution to you. We've talked to Saint Francis, Baptist and Methodist (hospitals) and they support the THA position. We are encouraging you to endorse that and we are behind you if you do," Muller told the Shelby delegation's weekly meeting.

Chamber executives also asked the delegation to seek $5 million in state highway money for a planned $25 million upgrade of the Lamar Avenue intersection with Holmes Road -- the first step toward improving gridlocked Lamar between the Mississippi border and Interstate 240.

The $5 million would be paired with $20 million in federal highway money to upgrade the single-grade, signal-controlled intersection into an interstate-style, dual-grade interchange.

Cliff Stockton, the chamber's senior advisor for logistics and public policy, said some of the major companies whose warehouses and distribution centers line that stretch of Lamar have warned that if the highway isn't improved, they could move their operations to Mississippi, where U.S. 78 is already an interstate-quality, limited-access roadway that will eventually become Interstate 22 connecting Memphis to Birmingham.

"And take it from me, two of them already have as much square footage in Mississippi as they do in Memphis and they can easily do it (move)," Stockton said.

A Tennessee Department of Transportation study of what needs to be done to improve that stretch of Lamar is to be finished this summer and Muller said TDOT is working with Memphis on the plan.