Committee backs bill to preserve hospital funding mechanism that unlocks federal match

Senate Bill 101 would eliminate the scheduled repeal of New Mexico’s Healthcare Delivery and Access Act so the state can continue a tax-collection mechanism hospitals use to generate federal matching dollars. Sponsor remarks and agency testimony emphasized the program’s scale and role: the Health Care Authority estimated the program has generated about $1.3 billion (mostly federal match) and that eliminating the program in 2030 would cause substantial disruption to hospital funding, workforce investments, and rural services.

Carrie Armijo, cabinet secretary of the Health Care Authority, told the committee the program has stabilized and strengthened the health-care system and that retaining the tax avoids “premature and permanent cuts that would cause significant and potentially catastrophic damage to our health care system.” Business and hospital groups — including the Greater Albuquerque Chamber of Commerce and the New Mexico Hospital Association — testified in support, citing predictability for workforce recruitment and rural viability.

Committee members asked about how funds are distributed and oversight. HCA said payments are made on the basis of Medicaid discharges per federal rules and that hospitals must report how they spend the funds; the first statutorily required report will be public and available to legislators on Aug. 1. The department noted a 75% minimum of generated dollars must be spent on services in New Mexico.

The committee moved for a due pass on SB101 and recorded no objections in the transcript; the chair announced a due pass recommendation.

What happens next: The due-pass recommendation advances the bill in the legislative process; HCA reporting and audits will be the primary transparency tools for lawmakers to track use of the funds.