MACPAC Comments on CMS Proposed Rule to Revise Health Care Tax Safe Harbor Threshold

The Medicaid and CHIP Payment and Access Commission (MACPAC) submitted comments to CMS on a proposed rule that would revise the indirect hold harmless threshold — the safe harbor — used to determine whether health care-related taxes impermissibly shift Medicaid costs to the federal government. The proposed rule changes how CMS evaluates whether provider tax arrangements violate federal Medicaid financing requirements. This affects state Medicaid financing strategies that rely on provider taxes to fund non-federal share of payments, a common mechanism used by states to draw down federal matching funds.

Finance