In the wake of recent efforts to limit the ability of states to use provider taxes to help fund their Medicaid programs, the Alliance of Safety-Net Hospitals has asked the Centers for Medicare & Medicaid Services to phase in changes in current policy over a period of three years.

Since CMS’s publication of a proposed rule to regulate provider taxes, Congress included a similar provision in its recent budget reconciliation bill (the “One Big, Beautiful Bill).  In its letter, ASH makes its case for adoption of Congress’s approach, which would establish a three-year glide path to new limits on provider taxes.

In its letter, ASH notes the importance of Medicaid provider taxes to the ability of almost all states to adequately fund their Medicaid programs – and, in turn, the importance of that adequate funding to hospitals, and especially to community safety-net hospitals, which serve larger numbers and higher proportions of Medicaid patients and are therefore more dependent on Medicaid revenue than the typical American hospital.  For these reasons, ASH in its letter writes that

We strongly urge CMS to employ the discretion the One, Big Beautiful Bill (OBBB) Act offers and give all states a transition period of up to three fiscal years to phase out any impermissible aspects of their assessment programs…

Learn more from ASH’s letter to CMS.