Medicaid Program; Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes
Built by the Tribune's code from the Federal Register. No AI wrote this page. Published in the Federal Register July 23, 2026. Document 2026-14897. Updated Nov. 8, 2026.
- What it does
This proposed rule would revise standards for determining whether an indirect hold harmless arrangement exists for a health care- related tax. This proposed rule is necessary to implement a provision in the "One Big Beautiful Bill Act," herein referred to as the "Working Families Tax Cut (WFTC) legislation," which established new indirect hold harmless thresholds for health care-related taxes. Currently, the threshold for a State's collection of tax revenues is no more than 6 percent of net patient revenue attributable to the assessed permissible class of health care items or services. Effective October 1, 2026, the WFTC legislation generally sets the threshold equal to the applicable percent of net patient revenue attributable to taxes imposed as of July 4, 2025. Effective October 1, 2027, the WFTC legislation also requires a phase down of the hold harmless threshold in expansion States. Apart from establishing the new threshold in regulation and proposing related changes and enhancements to existing processes, we propose to sunset a secondary prong to the indirect hold harmless determination to ensure the thresholds determined as of July 4, 2025, serve as the maximum permissible level. Finally, this rule proposes to add a new permissible class to enhance CMS oversight of health care- related taxes.
The Centers for Medicare & Medicaid Services's summary, as published in the Federal Register.
- What it would change
1 part of Title 42 of the Code of Federal Regulations:
- Before this
No earlier Federal Register document under regulation identifier 0938-AV93 since Jan. 1, 2025.
- What happens next and when
To be assured consideration, comments must be received at one of the addresses provided below, by September 21, 2026.
The agency's dates, word for word.
The record as published
| Document number | 2026-14897 |
|---|---|
| Action | Proposed rule. |
| Agencies | Health and Human Services Department; Centers for Medicare & Medicaid Services |
| Published | July 23, 2026 |
| Comments close | Sept. 21, 2026 |
| Regulation identifier (RIN) | 0938-AV93 |
| Docket | CMS-2026-2476 |
Source: the Federal Register (public domain). The document in the Federal Register