CMS: Medicaid Program; Preserving Medicaid Funding for Vulnerable Populations-Closing a Health Care-Related Tax Loophole

Federal Register

Feb 2, 2026

Notice of final rule from the Centers for Medicare & Medicaid Services (CMS) closing a loophole in a regulatory statistical test applied to State proposals for Medicaid tax waivers. The loophole allows some healthcare-related taxes, especially taxes on managed care organizations, to be imposed at higher tax rates on Medicaid taxable units than non-Medicaid taxable units. This rule adds additional safeguards to ensure that tax waivers that exploit the loophole are not approved. This final rule also summarizes comments CMS received in response to the proposed rule, including the impact of changes to healthcare-related tax revenues on rural providers. These regulations are effective April 3, 2026.

Healthcare business and finance · Healthcare facilities · Legislation and regulations · Medicaid