KHI News Service

House committees endorse provider tax

New tax could boost Medicaid payments for those who serve the developmentally disabled

By Dave Ranney | March 29, 2011

A pair of House committees have passed a bill that would tax community-based programs for people with developmental disabilities.

Revenues from the proposed tax would then be used to leverage additional federal Medicaid dollars for the programs, similar to existing provider taxes for hospitals and nursing homes.

Senate Bill 210 is now on general orders in the House.

“We hope it comes up for a vote tomorrow,” said Tom Laing, executive director at Interhab, an association that represents community-based programs for the developmentally disabled.

According to a Kansas Division of Budget analysis, the tax would raise almost $20 million a year from the centers, generating an additional $27 million in federal funding.

“This is an opportunity to bring an additional $27 million in federal funds into our state,” said Rep. Bob Bethell, an Alden Republican and chairman of the House Aging and Long-term Care Committee.

The bill was double-referred to the long-term care and social service budget committees. The committees heard the bill on Monday.

“Everybody on the long-term care committee voted for it,” Bethell said. “A few members of the social services committee voted against it, but it still passed. There weren’t any amendments.”

The bill passed the Senate, 39-0, last week.

If the bill becomes law, local programs for the developmentally disabled would pay a 5.5 percent tax on their gross revenues. The tax, in turn, would be deposited in a state-administered fund and used to match federal Medicaid dollars.

More than 200 local programs and service providers would be affected by the tax.

Revenue generated by both the tax and the matching funds — roughly $47 million — would be used to increase the Medicaid rates paid to providers of services for the developmentally disabled.

Federal officials have yet to approve the arrangement.

In Kansas, service providers for the developmentally disabled have long complained that their Medicaid rates have not kept pace with inflation.