Provider Tax

Hospital/Managed Care/Long Term Care Taxes, HB 2747, Ch. 736

Passed in the 2003 Oregon Legislative Session

The legislation imposes an assessment on hospitals, prepaid managed care health services organizations and long-term care facilities. The taxes are administered by the Department of Human Services.

The hospital assessment is imposed at a rate set by the director of the department, in consultation with hospital representatives, and may not exceed three percent of hospital net revenue. Funds generated by the hospital assessment are continuously appropriated to the department for the purpose of funding increased reimbursement rates for inpatient and outpatient hospital services and continuing hospital services for Oregon Health Plan standard population. The assessment is also used for covering administrative costs associated with the program.

The Oregon Hospital Provider Tax was implemented in October 2004, and since that time, Oregon hospitals with over 50 beds have been subject to a tax on their net patient revenue. This tax revenue is used to garner federal Medicaid matching funds with the combined resources comprising funding of the Oregon Health Plan Standard (OHP-S) Plan. In addition to funding approximately 24,000 enrollees in OHP-S, Medicaid fee-for-service rates were increased slightly, so that in the aggregate these increased rates would offset the new tax.

For more information, please review our draft definitions of the Oregon Administrative Rules.