It is increasingly crucial that EMS agencies, and their stakeholders, pay close attention to legislative initiatives that could impact reimbursement for ambulance services.

We recommend active engagement with professional associations advocating for appropriate reimbursement for vital ambulance services!

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Senate GOP proposes bigger Medicaid cuts than House

By: Michael McAuliff

June 16, 2025 06:03 PM

https://www.modernhealthcare.com/politics-regulation/mh-one-big-beautiful-bill-senate-provider-tax/

Senate Republicans are eying even deeper Medicaid cuts and stricter limits on the provider taxes states use to finance the program under legislation introduced Monday.

The House-passed version of the One Big Beautiful Bill Act of 2025 would establish a moratorium on new provider taxes. The Senate Finance Committee portion of the upper chamber’s bill would go further by ordering the District of Columbia and the 40 states that expanded Medicaid under the Affordable Care Act of 2010 to reduce their provider taxes.

States tax providers to help raise their share of funding for the state-federal health program for low-income people. Providers tend to come out ahead because this financing mechanism enables states to maintain Medicaid benefits and reimbursements.

The catch is states may only pay back up to 6% of a provider’s revenue in what’s known as a “safe harbor.” Rather than freezing provider taxes at 6% and barring new ones, as the House bill would do, the Senate measure would start rolling back the safe harbor in 2027 and cap it at 3.5% in 2031.

The nonpartisan Congressional Budget Office has not evaluated the new legislation. But the nonpartisan health policy research institution KFF previously estimated that restricting the provider tax “safe harbor” to 5% would reduce federal spending by $48 billion over 10 years and that limiting it to 2.5% would cut expenditures $241 billion.

The Finance Committee similarly targets so-called state-directed payments in Medicaid expansion states. States utilize this policy to set minimum provider reimbursements for Medicaid managed care insurers. Under the Senate measure, those payments could not exceed Medicare rates in expansion states, while the remaining 10 states could set payments up to 110% of Medicare.

The Senate bill notably doesn’t include an increase in Medicare payments to physicians.

In a news release, Finance Committee Chair Mike Crapo (R-Idaho) does not address the healthcare provisions but said the legislation could change as Congress strives to deliver it to President Donald Trump by July 4.

“I look forward to continued coordination with our colleagues in the House and the administration to deliver President Trump’s bold economic agenda for the American people as quickly as possible,” Crapo said.

The chief purposes of the bill are to extend tax cuts Trump enacted during his first term and to slash spending across the government, which a particular emphasis on healthcare programs. According to the CBO, the House bill would cut healthcare funding by more than $1 trillion, with more than 80% coming from Medicaid.

Finance Committee ranking member Ron Wyden (D-Ore.) slammed the Senate bill in a news release. “The House Republican version of this bill was already a class war, but Senate Republicans decided to inflict even more devastation on the lives of working Americans to give even larger handouts to the top,” he said.

“The biggest winners here are wealthy corporations who would get hundreds of billions of dollars in additional tax breaks on top of what they got in the House Republican bill,” Wyden said. “Senate Republicans would pay for those new corporate tax breaks by making even deeper cuts to Medicaid, slashing funding for rural hospitals and other essential healthcare providers, and throwing cash-strapped states off a funding cliff.”

There is little Democrats can do impede the GOP majority in Congress, which is using expedited procedures under so-called budget reconciliation rules that allow bills to pass the Senate on simple majority votes and don’t permit filibusters.

However, at least four Republicans have raised concerns about Medicaid cuts in recent weeks. The GOP has a 53-47 majority, meaning Majority Leader John Thune (R-S.C.) can afford to lose three votes and still advance the legislation.