Medicaid Health Provider Taxes Targeted for House Budget Cuts

A congressional bid to trim Medicaid costs by curbing state taxes on health-care providers stands to face pushback from governors over concerns it would shift more of the program’s cost burden to states.

States use taxes on providers such as hospitals and nursing homes to generate state Medicaid funding, which is used to generate federal matching payments to the states. The financing method, which is adopted by 49 states and the District of Columbia, is criticized by some policy observers as a creative maneuver that artificially boosts the amount of funding states receive from the federal government.

Republican members of ...