NW Kansas 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 adjustment will generate revenue from prospective payment system (PPS) hospitals in Kansas, which is then matched by federal Medicaid dollars. The change is expected to increase Medicaid rates for Kansas hospitals and physicians and bring in about $1 billion annually for these facilities.

“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,” said Senator Jerry Moran (R-Kan.). “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.”

Hospital leaders expressed their support for the approval. “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,” they stated. “As with any significant achievement, it took many to reach this goal including our congressional delegation, led by Senator Moran, as well as the Governor, KDHE leadership and the Medicaid finance team.”

Another statement read: “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.”

Further comments highlighted how these funds will impact local communities: “We were excited and grateful to learn of the CMS approval of the 2025 Provider Tax preprint. 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.”

Finally: “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,” another statement read. “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.”

In 2024, legislation passed by the Kansas State Legislature increased the cap on provider taxes for PPS hospitals from 3% up to 6%. The law required CMS approval before taking effect. As a result of this change, PPS hospitals face a higher assessment rate but can access greater federal Medicaid reimbursements over at least ten years. Unlike states that expanded Medicaid under federal law—which have their provider taxes capped at 3.5%—Kansas does not face such a limit.