KHI News Service

Provider tax to generate less than projected

By Dave Ranney | July 29, 2010

Kansas Department on Aging officials say a bed tax on nursing homes will be less than initially projected and, in turn, will draw down fewer federal dollars.

Throughout much of this year’s legislative session, the tax was expected to generate an additional $30 million which would then be used to draw down $56 million in additional federal Medicaid funding.

At first, the $86 million was thought to be the amount needed to restore recent cuts in nursing home funding.

The cuts were calculated using a formula that’s tied to nursing home expenditures. These expenditures turned out to be less than projected, lowering the amount that needed to be raised.

“What happened was nursing homes — because of all the cuts — have really cut back on their costs,” said Bill McDaniel, commissioner of programs and policy at KDoA. “So when we went back and looked at those costs, there wasn’t as much there.”

Now, the tax is expected to raise $23.1 million, which will be used to draw down $43.3 million in additional Medicaid funding.

“The way things worked out, were we able to accomplish everything the bill set out to do for $66.4 million rather than for $86 million,” McDaniel said.


Nursing home provider tax projections

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KDoA provided KHI News Service with the latest projections on how each nursing home would be affected by the tax.

“The number of winners and losers stayed pretty much the same because the amount a nursing home gets back depends on their Medicaid caseload,” McDaniel said. “That’s not changed.”

Because the bed tax won’t be as much as projected, he said, nursing homes won’t get back as much as projected.

“I don’t have a problem with that,” said Rep. Bob Bethell, R-Alden, who helped craft the so-called provider tax bill. “We’re still coming out $60 million ahead.”

Bethell is a former nursing home administrator.

The governor signed House Bill 2320 into law during a June 29 ceremony at Wheatland Nursing and Rehab Center in Russell.

The tax does not take effect until its mechanisms are approved by the regional Centers for Medicare and Medicaid Services office in Kansas City.

“It could take up to six months,” McDaniel said. “We hope it doesn’t, but it could.”

If approved, the payments will be retroactive to July 1.