White House Ponders Lowering Provider Tax Threshold

The White House's 2013 budget proposes lowering the Medicaid provider tax threshold to 3.5% in an effort to lower the national deficit. It estimates that this would save $21.8 billion on federal Medicaid payments between 2015 and 2022.

The provider tax, also known as a "bed tax," uses provider tax revenue to help finance Medicaid, which in turn pays for a bulk of nursing home care. Forty-three states currently have a provider tax.

Greg Crist, spokesman for the American Health Care Association, criticized the plan. "What's missing in these reports is the human element - the complete picture of who provider assessments directly benefit and how their lives are changed for the better because of the care they receive in our centers. This is a significant source of income for providers who already face a significant shortfall in Medicaid reimbursement. If those assessments are scaled back, there's real concern those less fortunate patients and residents won't be able to have their care paid for by Medicaid."

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