A recent update from the County Commissioners Association of Ohio (CCAO) has given the Scioto County Commissioners reason to continue hoping for an answer to the Medicaid managed care organizations (MCO) elimination.
The CCAO reported Wednesday that an amendment is included in the conference committee report. The amendment, submitted by Rep. Bill Seitz and Rep. Matt Dolan, will give counties an additional six years to prepare for the tax elimination.
A statement from the CCAO explains that the amendment will “[r]equires the state to seek federal approval from the Centers for Medicare and Medicaid Services (CMS) to reset the franchise fee on health insuring corporations (HIC) to raise an additional $207 M per year to be distributed to counties and transit authorities.”
If federal approval is granted, the State will distribute payments shortly after July 2018 to counties and transit authorities equal to their Medicaid MCO tax receipts collected during calendar years 2015 and 2016. The payments will sunset after the six-year period. The amendment also retains the original transition aid contained in the executive proposal that makes one-time payments to counties and transit authorities in the fiscal year 2018 based on counties’ reliance, as determined by the administration’s formula.
“This would give us more time to adjust our budget and find replacement revenue. If this passes it will be a huge win for counties and organizations all across the state of Ohio,” Scioto County Commissioner Bryan Davis stated.
Increasing the HIC franchise fee will not jeopardize the current waiver.
“ In the event that the request to reset the fee is not approved, our existing waiver would remain in place. These waivers are not discretionary. The original waiver met the criteria necessary and cannot be withdrawn,” the CCAO assured. “The amendment directs the state to take a stair-step approach in talking with CMS for approval to reset the proposed HIC franchise fees. It instructs the Medicaid Director to first ask CMS if Ohio’s franchise fee can be increased, and if the Director receives a favorable response, then the Director shall request formal approval.”
The MCO current law provides “all transactions by which health care services are paid for, reimbursed, provided, delivered, arranged for, or otherwise made available by a Medicaid health insuring corporation pursuant to the corporation’s contract with the state” is subject to both state and local sales and use taxes collected by the Department of Taxation. For purposes of collecting the tax, the MCO is considered the consumer of the service. The state and local sales taxes are collected by the state and the local portion is remitted to the county. For purposes of applying local sales taxes, the state credits the local sales tax to the county of residence of the MCO enrollee. Overly simplified, the MCO tax is a piggyback sales tax on Medicaid transactions. It’s elimination without a replacement option will result in the county facing an estimated $2.1 million in cuts to funding that helps operate such program as 4-H.
County Commissioners encourage community members to call their representatives to express their support and to call the Governor John Kasich’s Office and urge him not to veto the amendment.
Reach Nikki Blankenship at 740-353-3101 ext. 1931.