Congress moves to restore state Medicaid provider taxes, raising hospital costs

What it does

This bill repeals Section 71115 of Public Law 119-21, which had made changes to how states tax Medicaid providers (hospitals, nursing homes, etc.). By repealing that section, the bill restores the Medicaid provider tax rules to what they were before those changes took effect, undoing whatever restrictions or modifications that section had imposed.

Why we flagged it

The bill's sole function is to undo a prior restriction on state Medicaid provider taxes by repealing the section that imposed it. This is a straightforward restoration of prior tax authority, not a new policy initiative.

What the text implies

• The bill's effect depends entirely on what Section 71115 of P.L. 119-21 actually restricted. Without access to that section's text, the precise scope of restored provider tax authority cannot be determined from this bill alone.
• Restoring provider taxes may increase Medicaid program costs for states, potentially triggering budget pressures or requiring offsetting cuts elsewhere in state budgets.
• Hospitals and other Medicaid providers will face higher state tax burdens, which may reduce their margins, limit expansion, or lead to cost-shifting to private payers or patients.
• States that had adjusted Medicaid reimbursement rates or provider payment models in response to Section 71115 may need to recalibrate those policies if provider taxes increase.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Repealing provider tax restrictions may increase state Medicaid revenue, potentially supporting hospital funding and care access, but it also increases costs borne by hospitals and nursing homes, which may be passed to patients, insurers, or staff. The net effect on ordinary citizens depends on how states use the recovered revenue and whether provider cost increases translate to reduced care or higher premiums.

Who stands to gain

• state governments (via restored provider tax revenue)
• state Medicaid programs (via increased funding)

Named in the bill

Public Law 119-21, Section 71115, Medicaid program, state governments, hospitals, nursing homes, Medicaid providers

Where it stands

23 cosponsors: 23 Democrats.

• Jul 29, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jul 29, 2025 — Referred to House Committee on Energy and Commerce · Congress.gov: “Referred to the House Committee on Energy and Commerce”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $480,000 in lobbying spend. A filing names 16 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Greg Landsman, the sponsor, reported $1,006,728 in PAC receipts in the 2026 cycle.

• California Hospital Association — $410,000 on 1 filing
• Hospital & Healthsystem Association of Pennsylvania — $70,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.