MMA Modifies Position on Provider Tax Replacement

With less than two weeks in the session, the MMA continues to advocate to replace the funding mechanism for Minnesota public health programs funded by the Health Care Access Fund. 

The provider tax is scheduled to sunset at the end of this year; if it does it would create a $1.4 billion hole in the state’s health care budget threatening coverage for Minnesotans who rely on Medical Assistance, MinnesotaCare, and many other health access programs. 

The Democratic-led House wants to preserve the provider tax in its current form; the Republican-led Senate wants to stick to the repeal and have proposed cuts to the services covered by public health programs while shifting health care spending to the General Fund. 

The MMA has supported replacing the provider tax with a claims expenditure assessment (CEA), HF 2789/SF 2616, that would be applied to paid claims processed by health plans and third-party administrators (TPAs). As the House and Senate’s conflicting positions have became more entrenched, the MMA has proposed continuing the provider tax on hospitals and wholesale drug distributors, which account for two-thirds of the money raised, while enacting the CEA for outpatient services. 

This combined provider tax/CEA approach would reduce the greatest flaws of the provider tax – it would exclude out-of-pocket payments and slash its greatest administrative inefficiencies, the burden of tax collection and auditing for the more than 7,000 physician clinics, dentists, psychologists, chiropractors, and other health care providers.

Earlier this week, the MMA sent out an Action Alert to members asking them to call their state representative and senator to urge them to consider this combination.