Association Comments on Provider Tax Proposed Rule

In a Sept. 21 letter to the Centers for Medicare & Medicaid Services (CMS), America's Essential Hospitals responded to the agency's Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes proposed rule.

The proposed rule implements provisions in the Working Families Tax Cut legislation (WFTCL) to impose new restrictions on states' use of provider taxes. The rule will have significant implications on states' ability to use provider taxes to finance the nonfederal share of Medicaid expenditures.

Specifically, the association urged CMS to:

• Maintain provisions of the proposed rule that align with the statute and existing policy
• Align implementation of the hold harmless provisions with the state fiscal year rather than federal fiscal year
• Allow prospective calculation of compliance with hold harmless thresholds
• Not add limits on intergovernmental transfers that exceed CMS' authority
• Ensure that the calculation of initial hold harmless thresholds under the WFTCL is based on policies in place as of the WFTCL's enactment

Contact Director of Policy Rob Nelb, MPH, at [email protected] or 202.585.0127 with questions.