Texas proposes new SNF tax to enhance Medicaid

Texas is testing the waters on a statewide nursing home “reinvestment allowance” fee that has been dubbed by some as a ‘granny tax.’ The new tax, which would apply to every licensed nursing home in the state that serves Medicaid or private-pay residents, is an attempt to win more Medicaid matching funds, its sponsors say.

Under the proposed bill, SB 1130, each licensed skilled nursing facility (SNF) would be taxed based on a formula of gross care receipts and non-Medicare patient days. The taxes would contribute to a fund to help reimburse provider sites for Medicaid services. The tax fees could raise about $360 million over two years and prompt Medicaid matching funds of up to $800 million, according to a San Antonio Express-News article.

“Nursing homes face some very critical problems,” said state Sen. Juan Hinojosa, one of the bill’s sponsors. “The reimbursement rates for Medicaid are low and don’t cover the cost.”

But private-pay residents, who are outside Medicare and Medicaid, are dubbing the bill a ‘granny tax,’ wanting to know how the state will guarantee that the matching funds will come back to their retirement homes.

The bill’s current version makes it clear providers would be responsible for paying the tax themselves: “A facility may not list the reinvestment allowance as a separate charge on a resident’s billing statement or otherwise directly or indirectly attempt to charge the reinvestment allowance to a resident.”

Topics: Executive Leadership , Finance