CMS Issues Proposed Rule to Close Health Care-Related Tax Loophole

CMS released a proposed rule May 15 to address a loophole in a regulatory statistical test applied to state proposals for Medicaid tax waivers. The test is designed to ensure, as required by statute, that non-uniform or non-broad-based health care-related taxes, authorized under a waiver, are generally redistributive. 

The proposed provisions would better implement the statutory requirements by adding additional safeguards to ensure that tax waivers that exploit the loophole — because they pass the current statistical test but are not generally redistributive — are not approvable.

The rule has a 60-day comment period. MHA published an issue brief with additional information.