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Federal reconciliation changes raise questions about provider taxes, state‑directed payments and audits
Summary
KDHE staff briefed the committee on changes in the federal reconciliation package and proposed CMS rules that could limit provider‑tax arrangements, reduce some state‑directed payments and expand the universe of audits that recover federal funds.
Christine Osterland, deputy secretary for agency integration and state Medicaid director at KDHE, told the committee the reconciliation package and proposed CMS rules carry several provisions that may affect Kansas Medicaid financing.
Osterland said Kansas’ provider assessment program — the state’s provider “tax” that draws federal matching funds — is likely protected at the 6% safe-harbor level for non‑expansion states, and KDHE submitted a 2026 preprint to CMS before the reconciliation effective date to preserve…
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