Committee debates using hospital provider fee to fund noncitizen emergency services; staff advises clarifying bill

JBC staff told committee members a question has arisen about whether the hospital provider fee (HAS fee) is an appropriate state funding source for noncitizen emergency services expanded under recent eligibility changes. The department has been claiming enhanced federal match for these services and using the HAS fee as the state share, but Legislative Legal Services advised there is statutory ambiguity.

Kurtz (JBC staff) explained the HAS fee statute lists specific purposes and does not explicitly mention non‑emergency services for noncitizen populations; the department’s forecast assumes $23.7 million from the HAS fee for the fiscal year 2026‑27 for the expanded population. Staff said clarifying legislation would reduce legal risk that a challenge could assert the fee was used outside its statutory purposes.

Committee members debated options: run clarifying legislation now to codify the department’s interpretation, or presume permissibility until a challenge arises and run a fix later. Some members expressed concern that using the HAS fee for these purposes could marginally affect supplemental payments to small rural hospitals, because the fund interacts with upper payment limit calculations; staff said effects would likely be marginal but has not run a detailed calculation.

No final vote was taken; staff was directed to gather additional information and return if members feel compelled to act. Staff noted that if the committee prefers not to act now, departments can request supplemental appropriations later if legal advice or reconciliations change.