CMS issues guidance on Medicaid provider tax overhaul

Dive Brief:

The CMS issued preliminary guidance Friday on how it plans to implement new restrictions on provider taxes in Medicaid, one of the major changes to the safety-net insurance program during the Trump administration.

The One Big Beautiful Bill Act signed into law this summer largely prohibits new or increased provider taxes, which are arrangements that most states use to finance their share of Medicaid funding. Critics argue the taxes unfairly increase the federal government’s Medicaid costs.

The new guidance outlines specifics on the new limits as well as a transition timelines for states. “While closing a loophole that some states were taking advantage of to shift billions in costs onto federal taxpayers, we have crafted policy that gives states time to transition as the