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Provider taxes becoming more common

A controversial proposal to tax California hospitals in order to garner as much as $3.6 billion in additional federal Medicaid matching funds recently died because hospital leaders couldn’t agree on how much each facility should be assessed.
The California Hospital Association (CHA) proposal would have imposed a so-called “provider fee” on most of its 450 member facilities based on patient bed days. As much as $1.8 billion generated would be sent to the state, which would use it to collect the matching funds. The money would in turn come back to the hospitals in the form of higher Medicaid payments.