Managed care organization incentive payments

From the 2024 DOR Tax Exemption Study

82.04.43395(3) - Managed care organization incentive payments Description Managed care organizations may take a B&O tax deduction for income received as incentive payments for achieving quality performance standards established through 42 C.F.R. 438.6(b)(2), as it existed on July 28, 2019. "Managed care organization" refers to an organization authorized by the Office of the Insurance Commissioner to offer prepaid health care services to eligible clients through the Health Care Authority's Medicaid managed care programs. Purpose To lower costs for hospitals and managed care organizations. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.023 $0.023 $0.023 $0.023 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 $0.021 $0.023 $0.023 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. - No annual growth, estimated payments remain constant during the forecasted period of this study. Data Sour