Communications

(May 30, 2025) – The past few weeks in Washington, DC, have been hectic to say the least. Kansas Hospital Association staff worked extensively with the Kansas House of Representatives delegation to seek certain changes and clarifications in the One Big Beautiful Bill Act, the official name for the long-awaited budget reconciliation bill. The bill makes certain changes to Medicaid to generate long-term savings, namely by adding work requirements starting no later than the end of 2026 for Medicaid recipients who are able-bodied adults without children. Many policies that would have been more harmful for Kansas hospitals, like site-neutral payments in Medicare, changing the federal Medical Assistance percentage rate for Medicaid and reduced percentage caps on provider taxes, were not included.

However, the bill attempts to limit future increases in provider tax rates and state-directed payments. What "future increases" means dominated the vast majority of our interactions with Congress during the past month. For provider taxes, we were able to clarify that the bill's language of grandfathering in rates already "imposed" included Kansas' recently passed increase to six percent. However, the original bill said that state-directed payment rates would not be subject to a Medicare-rate cap only if they had been "approved" by the Centers for Medicare & Medicaid Services by the time the bill goes into effect.

This would have left out the bill passed during the 2025 Kansas legislative session that brings Kansas' Critical Access Hospitals and Rural Emergency Hospitals into the provider tax program to receive enhanced support. We worked with Representatives Derek Schmidt and Tracey Mann to address this problem. Their efforts paid off as the House Energy and Commerce Committee changed "approved" to "submitted." While this requires the Kansas Department of Health and Environment to work quickly to submit an updated preprint for 2026 that includes the CAHs and REHs in the provider tax program to CMS before the bill goes into effect, it keeps the window of achieving this open. Many thanks go to Representatives Schmidt and Mann and their offices for their diligent work on our hospitals' behalf!

This revised language, however, still leaves the state in a precarious position. KDHE knows the clock is ticking for them to submit the 2026 preprint and waiver on time, which is a moving target based on how fast Congress can pass and President Donald Trump can sign the One Big Beautiful Bill Act into law. KDHE is working with KHA staff to submit the 20206 pre-print and waiver by June 30. We are now working with our Senators to amend "submitted" to a date certain in the future that would give KDHE enough time to complete its work. Discussions are ongoing, but Senators have been receptive to our request.

While it is too early to tell how the debate will play out in the Senate, it will dominate the month of June on Capitol Hill. There are indications that some deficit hawks may try to bring back discussions on site-neutral payments and hard percentage caps on provider taxes, but at the same time, the chamber's moderates are unhappy with many of the House's Medicaid provisions. Regardless, we believe we've made headway in explaining our positions to our state's Senators. In our meeting with Senator Moran in early May, he discussed the importance of Kansas' provider tax program. As the bill proceeds and goes through the always-unpredictable legislative process, we will continue to press our concerns. Please keep us posted if you have any questions, and thank you for your continued involvement in our advocacy efforts!
--Chad Austin