Operators looking to construct new nursing facilities in New York could be met with a 3% tax hike under a Gov. Andrew Cuomo’s 2020-21 budget proposal.
Healthcare providers would be required to pay the fee in order to get a Certificate of Need approval to construct new nursing homes, hospital facilities, diagnostic treatment centers, ambulatory surgery centers and other clinics, the NY Post reported.
New York nursing home and healthcare providers are already grappling with a 1% Medicaid payment reduction that took effect at the start of the new year.
Currently, operators who apply for the certificate of need already must pay an administrative fee of up to $2,000 and a 0.55% fee on project costs.
Facilities that are fully-dependent on state funding would be exempt from the tax. Other providers could be “barred” from seeking Medicaid reimbursements in order to recoup money lost due to the tax, the report explained.
Assembly Health Committee Chairman Richard Gottfried (D) said the tax could prove to be a financial hardship on providers.
“This does not seem to be fully thought through. In the Public Health Law, ‘hospital’ is a broad term that includes not only things we ordinarily call hospitals, but also community health centers, clinics, nursing homes, etc,” Gottfried said.
“There are some wealthy hospitals that could afford to pay an extra $3 million for approval of a $100 million project. But there are many for which this fee would be a serious burden and hardship, especially facilities heavily dependent on Medicaid,” he added.
A spokesman for the governor’s budget division defended the tax by noting the fee hadn’t been adjusted for more than a decade. He added that the “3% adjustment simply aligns the structure to recognize operational expenses associated with this significant investment.”
Cuomo unveiled his $178-billion budget proposal last week. He hopes to close a $4 billion deficit in the Medicaid program.
