Jul 1, 2025
Wraparound amendment keeps provider tax intact, ups rural hospital fund
Jul 1, 2025
Illustration: Brendan Lynch/Axios
Senate Republicans appear to be keeping stricter Medicaid provider tax provisions in their latest version of reconciliation while doubling funds for a rural hospital provider fund, based on text of a wraparound amendment obtained from lobbyists.
Why it matters: It means that Senate Republicans are intent on making deeper cuts to the Medicaid provider tax rate to generate savings, despite concerns from moderates.
- That also makes it likelier the House will be forced to accept a stricter crackdown on provider taxes than the moratorium it included in its version of the bill.
What's inside: The rural hospital fund will now be $50 billion, up from $25 billion.
- A ban on Medicaid and CHIP funding of gender affirming care was left out of the legislation after it was found to violate the Byrd Rule.
- A Medicaid FMAP penalty from 90% to 80% percent for states covering undocumented immigrants with their own funds has also been removed. It also was found to violate the Byrd Rule.
- Two provisions in an earlier version of the bill that had increased certain health care payments for Alaska have also been killed after violating Byrd. It remains to be seen if Republicans can find a way to get a version that passes muster with the parliamentarian.
A one-year Medicare physician payment fix was retained in the bill, as well as language exempting more orphan drugs from Medicare drug price negotiations.
- The latest draft also keeps a one-year ban on Medicaid funding to Planned Parenthood or other large organizations that perform abortions.
