LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 5015

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JANUARY 8, 2026

 

 

SUMMARY

 

Synopsis:

Makes changes to how uniform gross receipts assessment are charged to ambulatory care facilities.

Type of Impact:

Annual decrease in State revenues.

Agencies Affected:

Department of Health and Department of Human Services.

 

 

Office of Legislative Services Estimate

Fiscal Impact

FY 2026

FY 2027 and Beyond

 

State Revenue Decrease

$23.2 million

$46.4 million

 

 

·         The Office of Legislative Services (OLS) concludes that the bill will decrease State revenue in FY 2026 by $23.3 million.  Of this amount, $7.7 million reflects reductions in revenue collected under the existing ambulatory care facility assessment, commencing on the first day of the third quarter of FY 2026, due to the provision in the bill that limits the annual amount that an ambulatory care facility is permitted to pay under the assessment to $2 million.  As the revenues generated under this assessment are used to support Medicaid providers, the remaining amount, or $15.6 million, represents revenue reductions in the form of federal Medicaid matching reimbursements.

 

·         In FY 2027 and beyond, when the impact of the bill is annualized, the State’s revenue reduction will grow to $46.4 million annually, $15.3 million due to a decline in revenue collections under the ambulatory care facility assessment and $31.1 million due to reductions in federal Medicaid matching reimbursements.

 

·         This estimate assumes that the State will receive federal approval to implement the provisions of this bill.

 

 

BILL DESCRIPTION

 

      The bill provides that, effective the first day of the third quarter of FY 2026, and subject to any necessary federal approvals applied for by the Department of Human Services, no ambulatory care facility is to pay an assessment greater than $2 million annually under the existing methodology for the ambulatory care facility assessment.

      The bill further stipulates that if the federal Centers for Medicare and Medicaid Services fails to approve the State’s application for any requisite Medicaid State plan amendments or waivers necessary to implement the provisions of the bill, and until the time such approvals may be received and in effect, the assessment on ambulatory care facilities will be implemented in accordance with the existing methodology.  Currently, the assessment rate is 2.5 percent on the gross receipts of an ambulatory care facility, which would remain unchanged under the new methodology implemented under the bill, and there is no cap on the amount an ambulatory care facility can annually pay under the assessment.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that the bill will decrease State revenue in FY 2026 by $23.3 million.  Of this amount, $7.7 million reflects reductions in revenue collected under the existing ambulatory care facility assessment, commencing on the first day of the third quarter of FY 2026, due to the provision in the bill that limits the annual amount that an ambulatory care facility is permitted to pay under the assessment to $2 million.  Currently, there is no cap under the fee structure for the ambulatory care facility assessment.  The bill does not alter the current assessment rate of 2.5 percent on the gross receipts of an ambulatory care facility.  

      As the revenues generated under this assessment are used to support Medicaid providers, the remaining amount, or $15.6 million, represents revenue reductions in the form of federal Medicaid matching reimbursements. This estimate assumes: 1) an aggregate federal matching rate of 67 percent for State Medicaid expenditures; and 2) that the State will receive federal approval to implement the provisions of this bill

      In FY 2027 and beyond, when the impact of the bill is annualized, the State’s revenue reduction will grow to $46.4 million annually, $15.3 million due to a decline in revenue collections under the ambulatory care facility assessment and $31.1 million due to reductions in federal Medicaid matching reimbursements.

      Based upon data provided by the Department of Health during the FY 2026 budget process, this bill will affect three ambulatory care facilities:

 

 

Section:

Human Services

Analyst:

Sarah Schmidt

Principal Research Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).