CMS finalizes changes to Medicaid provider tax waiver rules

The Centers for Medicare & Medicaid Services Jan. 29 issued a final rule regarding states non-uniform or non-broad-based provider tax, as authorized under special waivers. The final rule codifies statutory changes specified in the budget reconciliation bill, including prohibiting health care-related taxes that tax Medicaid providers at a higher rate than non-Medicaid providers, or tax high-volume Medicaid providers at a different rate than low-volume Medicaid providers. Additionally, the rule finalizes deadlines for transitioning non-compliant taxes. Managed care organization taxes approved within two years leading up to the rule’s effective date must comply by Jan. 1, 2027. Those approved more than two years before the rule’s effective date have until the state fiscal year 2028 to conform. All other provider taxes must meet compliance requirements by the state fiscal year 2029. The rule becomes effective April 3. AHA members will receive a Regulatory Advisory with more details.