President Trump Signs ‘One Big Beautiful Bill’ Into Law

On July 4, President Trump signed a budget reconciliation into law. It includes the following pertinent provisions:

• Provider tax reduction: Starting in 2028, the provider tax will begin to decrease by 0.5% annually until it reaches a new cap of 3.5%, down from the current threshold of 6%.
• Nursing facilities exemption from the provider tax reduction. It appears that the language in the new law allows Michigan to remain at a cap of 6%; however, we will continue to seek clarity on the language.
• Requirement that non-uniform provider tax programs reduce the rate variance among providers. This means it is likely Michigan will need to make changes to the provider tax program to reduce the varied rates providers currently pay.
• Reduction of retroactive Medicaid eligibility from 90 days down to 60 days. The law calls for changes in retroactive payments to begin January 1, 2027.
• 10-year delay of the federal staffing mandate for nursing facilities, which – in Congressional terms – is essentially a repeal. 

In previous versions of the bill, nursing facilities in expansion states would not be exempt from the provider tax reduction if the state makes changes to the provider tax. However, it looks as through the finalized version did not include language nullifying the exemption. For this reason, HCAM is optimistic that Michigan can remain at a cap of 6%. In addition, AHCA received written correspondence from the Senate Finance Committee on their intent that any changes Michigan needs to make to meet uniformity requirements should not invalidate the exemption. AHCA is developing a detailed member summary of the bill, which we will review and share with you when it is available.