Senate Bill 145 Alabama 2026 Session

Summary

Primary Sponsor

Greg AlbrittonSenator

Republican

Session

2026 Regular Session

Title

Hospitals, private hospital assessment and Medicaid funding program sunset clause removed

Summary

SB145 would permanently authorize Alabama’s hospital provider privilege tax and overhaul Medicaid hospital funding through a dedicated Hospital Assessment Account and new payment rules.

What This Bill Does

It removes the sunset on the hospital provider privilege tax, making the tax permanent effective October 1, 2026. It creates the Hospital Assessment Account in the Health Care Trust Fund to collect taxes and other funds and to pay hospital inpatient and outpatient payments, separate from the General Fund. It imposes a 6% net patient revenue assessment on privately operated hospitals for fiscal years 2026–2028, with net revenue calculated from CMS Medicare Cost Reports (2023–2025) and updated annually. It changes how hospital payments are set and paid, including base inpatient payments, outpatient payments, and quarterly hospital access payments, with intergovernmental transfers from publicly/state-owned hospitals to obtain federal matching funds, and it becomes effective October 1, 2026; if federal participation is not available, the act has no effect and funds may be refunded to hospitals.

Who It Affects

• Privately operated hospitals: would pay a 6% net patient revenue assessment and participate in the Hospital Assessment Account, affecting operating costs and revenue planning.
• Publicly owned/state-owned hospitals: would make intergovernmental transfers to the Medicaid Agency to obtain federal matching funds and would receive inpatient and outpatient payments under the new payment structure, subject to funding limits.

Key Provisions

• Permanent hospital provider privilege tax; sunset removal.
• Creation of the Hospital Assessment Account in the Health Care Trust Fund to hold tax revenues, penalties, and other funds for hospital payments; separate from the State General Fund; funds carried over and used for hospital payments.
• 6% net patient revenue assessment on privately operated hospitals for FY2026–2028, based on net revenue calculated from CMS Medicare Cost Reports (2023–2025) with annual updates; potential reductions if federal matching changes.
• Net patient revenue determined from CMS cost reports; hospitals must provide data if reports are unavailable; updates occur annually.
• Publicly/state-owned hospitals must make intergovernmental transfers to the Medicaid Agency to obtain federal matching funds; transfers must comply with federal law.
• Medicaid base payments for 2026–2028: greater of 2022 per diem or 68% of 2019 inpatient payments per patient day; outpatient base payments must be at least the corresponding outpatient UPL and follow a 2018 outpatient fee schedule (with panel-approved updates).
• Hospital access payments: quarterly payments to all eligible hospitals, up to the upper payment limit for each category, funded by the Hospital Assessment Account.
• Refunds or adjustments: if federal participation is unavailable, the act has no effect and funds may be refunded to hospitals; sunset repeal of prior termination provision (40-26B-88) is enacted.
• Effective date: October 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 12, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Taxation & Revenue