What’s happening: The Centers for Medicare & Medicaid Services (CMS) has issued proposed changes to the Medicaid health care-related tax rules that present significant risks for California’s managed care organization (MCO) tax and Hospital Quality Assurance Fee Program — both of which hospitals rely on to deliver patient care. Comments on the proposed rule are due to CMS by July 14.
What else to know: CHA is analyzing the proposed rule and its intersection with federal proposals in the House budget reconciliation package, which includes similar provisions.
The proposed rule would:
- Modify how CMS assesses whether a state’s provider tax is “generally redistributive” in approving waivers of the “broad-based” and “uniformity” requirements in federal statute
- Prohibit health care-related taxes that tax Medicaid business at a higher rate than non-Medicaid business, or tax high-volume Medicaid plans or providers at a different rate than low-volume Medicaid plans or providers
- Apply to all types of health care-related taxes used to finance elements of state Medicaid programs, including those imposed on hospitals, Medicaid MCOs, and other providers
Additional details are available in a CMS fact sheet. In the coming weeks, CHA will hold a member webinar to discuss the proposed rule and its intersection with federal proposals.
