Sunflower State News

The Centers for Medicare and Medicaid Services (CMS) has approved Kansas’ 2025 provider tax preprint, raising the state’s hospital provider tax from 3% to 6%. This move is expected to generate about $1 billion annually for Kansas hospitals through increased federal Medicaid reimbursements.

The change follows legislation passed by the Kansas State Legislature in 2024, which raised the cap on the provider tax for prospective payment system (PPS) hospitals. The approval from CMS allows PPS hospitals in Kansas to access higher federal matching funds. The increase does not affect states that have expanded Medicaid, as they are subject to a lower federal cap under the One Big Beautiful Bill Act.

Senator Jerry Moran (R-Kan.) commented on the development: “Last year, the Kansas legislature passed a bill to increase the state’s hospital provider tax, enabling Kansas hospitals and physicians to receive additional federal dollars from Medicaid,” he said. “Considering Kansas’ pending application before CMS, I worked to make certain the Medicaid reforms in the Reconciliation Bill would permit Kansas’ pending application to still be considered and approved. I worked with Kansas hospitals, the Kelly administration and Administrator Oz to make certain Kansas’ application was submitted and considered in a timely manner. This change will allow Kansas hospitals to receive additional resources to provide quality, affordable care to Kansans.”

A representative of Kansas hospitals noted: “Kansas hospitals were pleased to learn that the 2025 provider tax preprint, which allows the state to draw down federal matching funds to match the provider assessment at 6%, was approved,” adding that achieving this goal required collaboration among many parties including Senator Moran, Governor Laura Kelly, KDHE leadership and others.

Another statement praised Senator Moran’s ongoing support: “Senator Moran and his team are long-time champions of healthcare in Kansas We greatly appreciate his efforts to ensure qualifying hospitals across the state, particularly those in rural areas, can now receive much needed additional reimbursement for care provided to Medicaid patients. Access to quality healthcare close to home is critical for rural vitality across Kansas. With current anticipated changes and uncertainty in health care, this is an important step forward for hospitals in our state.”

Hospital leaders also expressed gratitude following CMS approval: “We were excited and grateful to learn of the CMS approval of the 2025 Provider Tax preprint,” one statement read. “These resources will help us ensure uninterrupted access to safe, high quality, hospital services in the rural Kansas communities that we serve. Senator Moran’s leadership on this issue during the approval process of the One Big Beautiful Bill was exceptionally important to its approval, and our words fall short on the difference this will make in so many Kansans lives.”

Another official added: “We are grateful to Sen. Moran for his work to ensure Kansas’ pending CMS application remained eligible for consideration amid changes to the Medicaid program,” continuing: “CMS’s decision to approve Kansas’ 2025 Provider Tax increase means more federal support will be available for rural hospitals to continue our work of providing critical services and care to communities across our state.”

With this change approved by CMS, PPS hospitals throughout Kansas will see increased Medicaid reimbursements over at least ten years.