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State seeks larger reserve for mandatory skilled nursing facility provider tax after some facilities failed to pay
Summary
The division asked the subcommittee to increase reserves in the mandatory skilled nursing facility provider tax account, citing nonpayment by several facilities and the need to preserve solvency and pay supplemental payments.
The division told the Joint Subcommittee on Human Services that Nevada’s skilled nursing facility (SNF) provider tax program — a mandatory tax established in state law and in place for roughly two decades — is facing reserve pressure because several facilities have outstanding tax balances.
Program overview and recent payouts
Stacy Weeks said the SNF tax is set at a maximum rate of 6 percent under state law, that the program serves about 57 facilities statewide, and that the division paid approximately $215 million in supplemental payments under the program in the last biennium. Of those payments, Weeks said about 73.7 percent (roughly $73.7 million) was funded via tax revenue, yielding a net gain of approximately $141.7 million to facilities in supplemental payments.
Reserve increase and enforcement
The division requested authority to increase the account reserve to ensure solvency and continued payments while the agency pursues collections from nonpaying facilities. Weeks said the agency is undertaking more active enforcement and collection efforts to shore up the tax account and reduce the need for recurring budget adjustments.
Why it matters
The SNF provider tax is a longstanding funding mechanism that supplements payments to skilled nursing facilities via federal matching funds. Delinquent payments by a subset of facilities create short-term cashflow and solvency risks for the program, the division said.
Ending
The division said it would continue collection efforts and will return to the committee with any material changes in account solvency or required legislative actions to enforce compliance.
