Nursing home lobbyists fight back against proposed provider tax reduction

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Gov. Mark Parkinson
Gov. Mark Parkinson

As lawmakers negotiated a budget deal Thursday, the American Health Care Association voiced its objection to cutting the Medicaid Provider Assessment statutory threshold.

A section of the Spending Reduction Act of 2012 act tackles changes to Medicaid, and among them is a proposed reduction of the assessment to 5.5% in 2014, down from a maximum 6%. The vote on the bill in the House of Representatives was put off Thursday night because there weren't enough GOP votes for Speaker John Boehner's (R-OH) so-called "Plan B" proposal. An embarrassed Boehner said it is now up to the Senate to pass a bill that might prove a workable framework.

AHCA President and CEO Mark Parkinson sent a strongly worded letter on Thursday asking House of Representative members to vote against the House proposal. 

“AHCA considers this a key vote, and will be communicating the results of the vote to our members, and the patients and families that they serve,” Parkinson wrote.

The proposed bill also would also repeal Medicaid and CHIP (Children's Health Insurance Program) Maintenance of Effort requirements under the Affordable Care Act.

Any reduction would cut into reimbursement for healthcare providers such as nursing homes, as states generally use the provider tax to generate new in-state funds that can be matched with additional federal funding for Medicaid.

Pushing back against lowering the threshold has been a frequent battle for industry groups. The Obama administration, for example, had proposed the tax ceiling drop to 3.5% by 2017, and Republicans floated the idea of a 0.5% reduction in June as a way to subsidize federal Stafford loans to students.

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