HOUSE CONCURRENT RESOLUTION Number 122

(By Delegates Nelson, Walters, Ellington, Boggs, Sponaugle, Bates, Hamilton, Pethtel, Frich, Storch, Gearheart, Barrett, Rowe and Hartman)

[Originating in the Committee on Finance;
Reported on April 5, 2017]

Requesting the Joint Committee on Government and Finance to conduct an interim study on how to increase funding for West Virginia’s Medicaid programs through the amendment of the State’s tax laws.

Whereas, the recent severe shortfalls in tax revenues and possible impending cuts in federal funding for the Medicaid program make it imperative that the State of West Virginia vigorously explore options to maximize federal matching funding; and

Whereas, while federal law permits taxes on various health care related items and services without affecting Medicaid matching funding, such taxes must generally be broad-based and must not treat non-Medicaid taxpayers differently from Medicaid taxpayers; and

Whereas, federal law recognizes an exception to the broad based uniformity requirements in situations in which a State is able to demonstrate that the net impact of the tax is “generally redistributive” under a statistical test set forth in federal regulations at 42 CFR 433.68; and

Whereas, the federal Center for Medicaid and Medicare Services (CMS) has recently approved the State of Ohio’s request for a waiver from such broad-based uniformity requirements under which a sales tax will be imposed on Medicaid managed care organizations (MCOs) as well as all other non-Medicaid medical plans that will, under Ohio’s estimates, result in a net benefit to the State of $615,000,000 in the next fiscal year, with only a corresponding impact on non-Medicaid MCOs of only $4,000,000; and     

Whereas, the realization of a similar program in West Virginia will require study by the Legislature in conjunction with the Bureau for Medical Services (BMS) and, if deemed a viable approach, require coordinated action by the Legislature to amend the state tax laws and by BMS to file a request by BMS for a waiver similar to Ohio’s; and

Whereas, The West Virginia Legislature has the authority to conduct a study of these issues and to seek long term solutions to the Medicaid funding crisis; therefore, be it

Resolved by the Legislature of West Virginia:

That the Joint Committee on Government and Finance is hereby requested to conduct an interim study on how to structure a new tax on Medicaid MCO’s that would be “generally redistributive” under the pertinent federal Medicaid regulations, and as such would satisfy the requirements for a waiver to be granted to the Bureau for Medical Services from CMS from the broad-based and uniformity requirements of the Medicaid laws; and, be it

Further Resolved, That the Joint Committee on Government and Finance is hereby requested to include in the study the identification of similar programs in other states that are designed to maximize federal matching funding; and, be it

Further Resolved, That the Bureau for Medical Services is directed to work with the Joint Committee on Government and Finance in evaluating the Code of West Virginia, the United States Code and other laws to identify statutes and regulations that would enable West Virginia to execute a program similar to Ohio’s; and, be it    

 Further Resolved, That a report of the findings, conclusions and recommendations of the studies, together with drafts of any legislation necessary to effectuate the recommendations, be reported to the Legislature at its 2018 regular session; and, be it    

Further Resolved, That the expenses necessary to conduct these studies and to prepare a report and draft necessary legislation are requested to be paid from legislative appropriations to the Joint Committee on Government and Finance.