Governor’s Budget Change Package Includes Repeal of Service Provider Tax

• By: Angela Westhoff
• On: 06/01/2023 13:26:34
• In: Legislative/Government Affairs

Governor Janet Mills' proposed budget change package (LD 258) includes a proposal to repeal the Service Provider Tax on health care providers, effective January 1, 2025.
 
According to a May 10^th DHHS article, repealing the tax will resolve a longstanding dispute with the Federal government that dates back to a 2018 warning from the U.S. Centers for Medicare and Medicaid Services that the nearly 20-year-old tax was allegedly in violation of Federal law.
 
The change package would repeal the tax and use nearly $20 million in ongoing general funds from the updated May 2023 revenue forecast to replace the lost revenue that supports MaineCare services. Additionally, the change package would add a one-time $6.5 million to the Medicaid Stabilization Fund in the event that CMS issues a disallowance for past use of the tax, bringing the total in that Fund to $29 million. 
 
MHCA has confirmed with DHHS that this will impact PNMI-Appendix C providers, but it does not impact the nursing facility tax (also known as NF gross receipts tax).
 
More information can be found here.
 
Staff contact: awesthoff@mehca.org