AHCA blasts cut in provider tax plan

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Editor's note: This story has been updated since the July 2012 print issue. Click here to read the updated version.

A GOP proposal to use Medicaid provider assessments to offset subsidies to the Stafford student loan program has drawn the fire of a leading provider association.

In a letter to House and Senate leaders, American Health Care Association President and CEO Mark Parkinson said lowering the Medicaid provider tax threshold from 6% to 5.5% would hurt nursing homes. 

“Limiting states' ability to use provider assessments to support their Medicaid programs would do nothing to reduce the cost of healthcare or make Medicaid more efficient,” Parkinson's letter states.

The reduction is being floated a way to keep the interest rate low on subsidized Stafford loans. But it 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 federal funds in order to receive additional federal Medicaid dollars.

Greg Crist of AHCA said long-term care providers frequently look to the assessment tax as a reliable source of revenue. It's a bad precedent for Congress to look at Medicaid funding to plug other budgetary holes, he said.