HB405 Alabama 2025 Session

Updated Feb 23, 2026

Notable

Summary

Primary Sponsor: Chris BlackshearRepresentative
Republican
Session: 2025 Regular Session
Title: Nursing facilities, privilege assessments and surcharge on each nursing home bed, assessment extended, to August 31, 2028
Summary: HB405 extends nursing facility privilege assessments and surcharges through August 31, 2028 and shifts Medicaid administration to the Alabama Medicaid Agency during that period.
What This Bill Does
Extends the current privilege assessment on each nursing facility bed, plus the supplemental and secondary privilege assessments and the surcharge, through August 31, 2028. During the period the assessments are levied, the Medicaid nursing facility program would be administered directly by the Alabama Medicaid Agency. The assessments and related costs would continue to be treated as allowable costs and used to set Medicaid per diem rates, with a mechanism to reduce those rates if total assessment revenues would push state revenues above a 6% cap of facility revenues. The act becomes effective June 1, 2025.

Who It Affects
Nursing facilities in Alabama: will continue paying per-bed privilege assessments and surcharges, which affect operating costs and Medicaid rate reimbursements.
Alabama Medicaid Agency and the state Medicaid program: will administer the nursing facility program directly during the period of levy/collection and adjust rates accordingly.

Key Provisions
Extends the base privilege assessment, supplemental privilege assessment, secondary privilege assessment, and the surcharge through August 31, 2028.
Keeps the per-bed base privilege assessment at $1,899.96, with an annual addition of $327.48 per bed, paid in equal monthly installments.
Requires the Medicaid nursing facility program to be administered directly by the Alabama Medicaid Agency during the period the privilege assessment is levied and collected.
Effective date: June 1, 2025.
Total assessments are treated as allowable costs in Medicaid rate calculations, with potential rate adjustments to keep total assessment revenues at or below 6% of total nursing facility revenues, and corresponding adjustments as needed.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Taxation & Revenue