Hospital incentive payments received through Medicaid quality improvement program

From the 2024 DOR Tax Exemption Study

82.04.43395(2)(a) - Hospital incentive payments received through Medicaid quality improvement program Description Certain hospitals may take a B&O tax deduction from income for incentive payments received through the Medicaid quality improvement program established through federal law. To claim this deduction, a hospital must be owned by a municipal corporation or political subdivision or must be affiliated with a state institution. Purpose To lower costs for hospitals and managed care organizations. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $3.072 $5.083 $4.551 $4.596 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this deduction would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $4.660 $4.551 $4.596 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Estimated payment amounts provided Health Care Authority for the forecasted period of this study. Data Sources - Health Care Authority, Medicaid estimated payments - Statista, "Number of Hospital