Provider tax-cut likely: HHS

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Despite chiding from long-term care providers, federal plans to halve a popular provider tax are likely to proceed. Speaking at an AHCA Congressional briefing, HHS Secretary Michael Leavitt said the tax is unfair and needs to be trimmed.

Currently, 32 states and the District of Columbia use the provider tax as a way to increase matching federal Medicaid payments. AHCA estimates that the reduction will trim providers' payments by $1.57 billion.

However, there are signs that some lawmakers oppose the cuts. Congressional correspondence opposing the bed tax cut have been circulating throughout Capitol Hill. A letter from Sen. Gordon Smith (R-OR) received 17 signatures from Republican members and 20 signatures from Democratic members this week during a two-day campaign. The National Governors Association this week also sent Leavitt a letter objecting to the tax cut proposal.

Many of those who signed the letters were dismayed by what they saw as the administration's attempt to skirt Congressional intent on this issue.

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