The Senate approved a bill that would reap more than $118 million a year in federal funds for hospitals who have seen their payments for caring for Medicare patients slashed.

"This will not be added to patients bills. In fact, the only way patients will pay more is if this doesn't pass to cover the Medicaid charges," said Sen. Curt Bramble, R-Provo.

SB273, sponsored "with mixed emotions" by Sen. Lyle Hillyard, R-Logan, would assess a fee on hospitals, which could then be used to attract federal dollars at a rate of more than three-to-one.

It would be used to prop up the hospitals' reimbursement rates for providing care to low-income Medicaid patients, which the state has cut 32 percent in recent years. All told, it would attract nearly $90 million in federal funds in the coming year.

The assessment, which the hospitals have lobbied for, would expire after three years.

Sen. Howard Stephenson, R-Draper, said that while the funds are available it makes sense to allow hospitals to access the federal money. Sen. Dennis Stowell, R-Parowan, said it would be especially beneficial to rural hospitals.

But Sen. Margaret Dayton, R-Orem, who won a hard-fought battle several years ago to repeal a similar assessment, then dubbed a "sick tax," opposed the measure.

"This is the hospital sick tax. This is the tax we killed once before and it took two years to do it," she said. "It was such a huge battle that, even with my sympathy for the hospitals, I can't support it."

The Senate passed the bill by a vote of 24-2 and sent it to the House for consideration. At least a half-dozen senators declared a conflict of interest, most because they serve on the boards of Utah hospitals. If it becomes law, Utah would be one of 44 states that imposes such an assessment.