HB721 Alabama 2010 Session

Summary

Primary Sponsor

John F. Knight Jr

Democrat

Session

Regular Session 2010

Title

Nursing homes, privilege license tax per bed, amount increased, additional supplemental tax per bed from September 2010 to August 2011, Medicaid per diem rate increase effective January 2011, reductions under certain conditions, Sec. 40-26B-21 am'd.

Summary

HB721 increases the nursing facility per-bed privilege tax, adds a new per-bed supplemental tax for 2010-2011, and links the supplemental tax to Medicaid per diem rate increases starting in 2011.

What This Bill Does

It raises the annual privilege tax from its current level to $1,899.96 per bed. It creates a new supplemental privilege tax of $1,063.08 per bed for September 1, 2010 through August 31, 2011. It treats the total taxes as allowable costs and includes the supplemental tax in the Medicaid per diem rate calculation starting January 2011, effectively prepaying the supplemental tax via higher Medicaid payments. It establishes a method to calculate the Medicaid per diem adjustment based on resident days and allows reductions in tax rates if total tax revenues fall below a threshold, with corresponding reductions to the Medicaid per diem adjustment so only paid amounts are used.

Who It Affects

• Nursing facilities: must pay the higher per-bed privilege tax and the new supplemental tax; the taxes become allowable costs and influence Medicaid per diem payments.
• Alabama Medicaid program and nursing facility residents: Medicaid per diem rates will increase beginning January 2011 to cover the supplemental tax, with adjustments based on tax revenue thresholds and resident-days data.

Key Provisions

• Section 40-26B-21(a): the annual privilege tax per bed is set at $1,899.96 (replacing the prior rate of $999.96).
• Section 40-26B-21(b): a new supplemental privilege tax per bed is imposed at $1,063.08 for September 1, 2010 through August 31, 2011 (replacing the prior $900.00).
• Section 40-26B-21(c): the total privilege taxes are treated as allowable costs and included in Medicaid per diem rate calculations; the supplemental tax amounts are included beginning January 1, 2011, for a period equal to the months the tax is in effect, with adjustments based on resident days reported.
• Section 40-26B-21(d): the tax rates may be reduced if total revenues from the taxes (plus supplement, if applicable) for a state fiscal year are 5.5% or less of total nursing facility revenues; any reduction would also reduce the Medicaid per diem adjustment accordingly to reflect actual payments.
• Section 2: the act becomes effective September 1, 2010.

AI-generated summary using openai/gpt-5-nano on Feb 25, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Nursing Homes