SB295 makes several changes to New Mexico’s Gross Receipts and Compensating Tax Act and related Medicaid reimbursement rules for health care providers. The bill expands and clarifies gross receipts tax deductions for health care practitioners and associations of health care practitioners by allowing deductions for receipts from certain health care services, including services paid through managed care arrangements, patient-paid services not under a managed care contract, and receipts from copayments and deductibles. It also removes the sunset date on an existing deduction for copayments and deductibles paid by insured patients, making that deduction permanent.
The bill also creates a new deduction for sales of medical equipment, medical supplies, and medical drugs to health care practitioners or their associations when those items are regularly used in practice. In addition, it adds a new requirement that when a health care provider receives Medicaid reimbursement, the provider must be reimbursed for all applicable gross receipts taxes owed on those services. The act takes effect July 1, 2025.
Impact
SB295 would reduce gross receipts tax liability for a broad range of health care practitioners, including physicians, dentists, nurses, therapists, psychologists, midwives, and certain clinical laboratories, as well as associations of those practitioners. It would also affect managed care organizations, health insurers, and Medicaid administration by expanding deductible categories and requiring Medicaid reimbursement to cover applicable gross receipts taxes. The bill amends Section 7-9-93 and creates new Section 7-9-93.1 in the Gross Receipts and Compensating Tax Act, while also adding a new reimbursement provision to the Public Assistance Act.
Sentiment
Based on the bill text alone and the absence of committee transcripts or recorded votes, the overall sentiment appears supportive and technical rather than contentious. The measure is framed as a tax simplification and relief bill for health care providers, with bipartisan sponsorship suggesting broad interest in addressing tax treatment of medical services and supplies. No formal opposition, amendments, or recorded vote history is available in the provided materials.
Contention
The main policy issues likely concern the fiscal impact of expanding gross receipts tax deductions and shifting tax costs in the Medicaid program. Potential points of contention include whether the deductions should apply to all health care services except Medicaid, whether removing the sunset date for the copayment/deductible deduction should be permanent, and whether the state should reimburse providers for all gross receipts taxes associated with Medicaid services. Another possible issue is the breadth of covered practitioners and entities, including whether the bill should extend to naturopathic doctors and clinical laboratories, and how the deductions interact with managed care and insurer billing arrangements.
A bill for an act relating to protections for medical practitioners, health care institutions, and health care payors including those related to the exercise of conscience, whistleblower activities, and free speech, and providing penalties.
A bill for an act relating to protections for medical practitioners, health care institutions, and health care payors including those related to the exercise of conscience, whistleblower activities, and free speech, and providing penalties.(See HF 571.)