Sen. Moran Statement on CMS Decision to Approve Kansas’ Application to Increase Federal Reimbursements for Kansas Hospitals

WASHINGTON - U.S. Senator Jerry Moran (R-Kan.) today applauded the decision by the Centers for Medicare and Medicaid Services (CMS) to approve Kansas' 2025 provider tax preprint, increasing the provider tax to 6% from 3%. This will generate revenue from prospective payment system (PPS) hospitals in Kansas, which in turn is matched by federal Medicaid dollars. This change will increase Medicaid rates to Kansas hospitals and physicians and is expected to generate approximately $1 billion annually for Kansas hospitals.

"Last year, the Kansas legislature passed a bill to increase the state's hospital provider tax, enabling Kansas hospitals and physicians to receive additional federal dollars from Medicaid," said Sen. Moran. "Considering Kansas' pending application before CMS, I worked to make certain the Medicaid reforms in the Reconciliation Bill would permit Kansas' pending application to still be considered and approved. I worked with Kansas hospitals, the Kelly administration and Administrator Oz to make certain Kansas' application was submitted and considered in a timely manner. This change will allow Kansas hospitals to receive additional resources to provide quality, affordable care to Kansans."

"Kansas hospitals were pleased to learn that the 2025 provider tax preprint, which allows the state to draw down federal matching funds to match the provider assessment at 6%, was approved," said Chad Austin, President & CEO, Kansas Hospital Association. "As with any significant achievement, it took many to reach this goal including our congressional delegation, led by Senator Moran, as well as the Governor, KDHE leadership and the Medicaid finance team."

"Senator Moran and his team are long-time champions of healthcare in Kansas," said Bob Page, President & CEO, The University of Kansas Health System. "We greatly appreciate his efforts to ensure qualifying hospitals across the state, particularly those in rural areas, can now receive much needed additional reimbursement for care provided to Medicaid patients. Access to quality healthcare close to home is critical for rural vitality across Kansas. With current anticipated changes and uncertainty in health care, this is an important step forward for hospitals in our state."

"We were excited and grateful to learn of the CMS approval of the 2025 Provider Tax preprint," said Brian Williams, President & CEO, Labette Health. "These resources will help us ensure uninterrupted access to safe, high quality, hospital services in the rural Kansas communities that we serve. Senator Moran's leadership on this issue during the approval process of the One Big Beautiful Bill was exceptionally important to its approval, and our words fall short on the difference this will make in so many Kansans lives."

"We are grateful to Sen. Moran for his work to ensure Kansas' pending CMS application remained eligible for consideration amid changes to the Medicaid program," said Benjamin Anderson, President & CEO, Hutchinson Regional Medical Center. "CMS's decision to approve Kansas' 2025 Provider Tax increase means more federal support will be available for rural hospitals to continue our work of providing critical services and care to communities across our state."

Background information:

• In the 2024 legislative session, the Kansas State Legislature passed legislation to increase the state provider tax for prospective payment system (PPS) hospitals, raising the cap from 3% to 6%. The increase passed by the Kansas State Legislature had to be approved by CMS.
• This change means PPS hospitals will have a higher assessment rate, which in turn will allow them and all hospitals to access increased federal Medicaid reimbursements.
• The One Big Beautiful Bill Act capped state provider taxes at 3.5% for Medicaid expansion states, but non-expansion states, like Kansas, are not subject to the federal state provider tax cap.
• With the increased state provider tax cap, Kansas providers will receive increased Medicaid reimbursements for the next decade.

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