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Bill would raise hospital provider assessment to 6% and add some rural hospitals to pool
Summary
House Bill 2,250 would permit an assessment up to 6% of net hospital operating revenue, extend inclusion of certain critical access and rural emergency hospitals above a revenue threshold, and set payment timing and collection mechanisms for nonpayment.
The House Health and Human Services Committee heard House Bill 2,250, which would increase Kansas's hospital provider assessment to an amount not greater than 6% of each hospital's net inpatient and outpatient operating revenue and expand participation by some critical access hospitals (CAHs) and rural emergency hospitals (REHs).
Carly, committee staff, described the bill's key provisions: amending KSA 65-6208 to allow an assessment up to 6%; exempting CAHs or REHs with revenues below a threshold set by the Health Care Access Improvement Panel; and changing payment installments to due on or before May 30 and November 30. The Department of Health and Environment would be authorized to take legal action against hospitals that fail to pay unless they have an approved payment schedule.
Audrey Dunkel, vice president for Medicaid and legal affairs at the Kansas Hospital Association, said the assessment program has operated for 20 years and the bill's significant change is including CAHs and REHs above a threshold so they share in the assessment revenue that is then used to draw federal Medicaid matching funds and increase hospital Medicaid payments. "So the assessment on the hospitals is paid to the state, goes into a special fund... it's then used to match federal Medicaid dollars," Dunkel said. She described Medicaid match rates around 61% and said the assessment revenue is redistributed based on hospitals' Medicaid claims.
Testimony provided a financial example and estimates: recent provider assessments have produced federal matching funds in the hundreds of millions of dollars; committee testimony projected that increasing the assessment toward 6% could bring nearly another $200 million, and adding CAHs/REHs could represent roughly $58 million in additional revenue. The proponents said the bill includes a cash-flow safeguard: CAHs and REHs with revenue below an estimated threshold (discussed as about $7,000,000 in annual revenue in committee testimony) would be exempt.
Representative questions focused on how the assessment redistribution works and on federal-level risks to provider tax caps; Audrey Dunkel said the bill requests authority to raise to 6% now to preserve flexibility if the federal cap changes. The committee did not vote on the bill during the hearing.
