LEGISLATIVE FISCAL ESTIMATE
SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 5015
STATE OF NEW JERSEY
221st LEGISLATURE
SUMMARY
DATED: JANUARY 15, 2026
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Synopsis: |
Makes changes to how uniform gross receipts assessment are charged to ambulatory care facilities. |
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Type of Impact: |
Annual decrease in State revenues. |
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Agencies Affected: |
Department of Health and Department of Human Services. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
FY 2026 |
FY 2027 and Beyond |
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State Revenue Decrease |
$23.2 million |
$46.4 million |
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· 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. Currently, there is no cap 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 assessment rate, which is 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 any necessary 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 as follows:
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Section: |
Human Services |
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Analyst: |
Principal Research Analyst |
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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.).