Illustration: Sarah Grillo / Axios
Republican senators who could provide the decisive votes on the reconciliation package say they want to revert to the House-passed moratorium on Medicaid provider taxes, discarding the tougher Senate provider tax reduction.
Why it matters: The way states could tax providers to help fund their Medicaid programs is shaping up as one of the thorniest issues in the reconciliation debate.
- Enough pressure from holdouts could cause Senate GOP leaders to change the language, even if that means less savings.
What they're saying: "I prefer freezing it," Senate HELP Chair Bill Cassidy told Axios on Tuesday, referring to the House-passed language that would stay new provider taxes and maintain existing ones at their current levels. "My initial thing was that I wanted a freeze."
- "Something I'm concerned about is the cash flow for hospitals," he added, saying he would "like to think" there was room for GOP leadership to change the bill, but that "everything is a push and pull."
- Sen. Josh Hawley, who has been vocal about his displeasure with the Senate's Medicaid measures, said reverting to the House's freeze "would be better" and "less harmful to rural hospitals."
- "I think that that would solve most [of the issues]," Hawley said. "The rural hospitals also identified some technical tweaks, but they're actually really important for implementation.… I think if we did [both of those things], that would probably be fine."
"Our rural hospitals are going to have a tough time. That's all there is to it," said Sen. Jim Justice. "I thought we were there … having the House proposal where we freeze it … but doing what [the Senate is] doing, that's a big concern."
- Justice added that he "sure would" be pushing Senate GOP leadership to go back to the House provider tax freeze, though he acknowledged that "you may have to hold your nose" and vote for disagreeable policies.
Moderate Sens. Lisa Murkowski and Susan Collins also told reporters this week that they had concerns about the provider tax provisions, though they didn't specify whether they want to go back to the House language.
Between the lines: State hospital groups in expansion and non-expansion states have signaled that they prefer the House-passed language.
- "We are writing to urge you to move forward with the carefully negotiated Medicaid provider tax-related and Medicaid directed payment program provisions in the House-passed budget reconciliation bill," a group of state hospital association presidents told top Senate Republicans in a letter last week.
- "These sections reflect a balanced approach that recognizes the vital role Medicaid directed payments play in sustaining access to care," the groups wrote.
The bottom line: If the Senate reverts to the House's language, that would dial down the expected savings potentially by billions.
- That could force them to adjust other portions of the reconciliation package by, for example, shortening the duration of tax policies or making further changes to energy tax credits.
