NAMD Comments on CMS Proposed Rule on Health Care-Related Taxes

In May 2025, CMS issued a proposed rule, Medicaid Program; Preserving Medicaid Funding for Vulnerable Populations—Closing a Health Care-Related Tax Loophole (CMS-2448-P). The rule proposes new criteria for determining whether health care-related taxes are “generally redistributive,” even if they pass the current statistical test.

Medicaid agencies report that the proposed “described attributes” would create uncertainty and subjectivity in CMS’ review process, leading to operational and fiscal challenges for states. Additionally, Medicaid agencies report significant concern over the proposed lack of a transition period for states with more recently approved non-compliant waivers and a one-year transition period for states with longer-standing non-compliant waivers. NAMD recommends that CMS provide a transition period of at least three years for all states to mitigate impacts on providers and Medicaid members.

Read NAMD’s full comments here.