The Healthcare Delivery and Access Act (SB 17)

SB 17 introduces an innovative funding model designed to stabilize hospitals and expand access to care statewide.

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• Funding Mechanism: Hospitals across New Mexico will contribute to a pooled fund via five assessment payments (four quarterly payments totaling 60% of a hospital’s assessed amount; and one annual payment of 40% of the hospital’s assessed amount, which is tied to the quality portion of the program. These funds are then used to secure a federal Medicaid match, growing the program to approximately $1.5 billion. 

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The assessment is set annually by the Health Care Authority and is based on assessed days for the inpatient assessment and assessed outpatient revenue for the outpatient assessment. Hospitals are required annually to attest to the Taxation and Revenue Department that their assessment rates are accurate.

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Rural, frontier, and specialty hospitals receive a 50% reduction in their tax rate and small urban hospitals receive a 90% reduction for their assessment.

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• Distribution Payments: Five times per year (quarterly and one annual payment in May tied to quality performance) hospitals receive distribution payments based on the proportion of their Medicaid volume relative to the other HDAA hospitals. The payments are a per claim percentage add-on based on inpatient and outpatient revenue. Prior to the payments being made, the Health Care Authority notifies each hospital’s CEO and CFO via email of the amount per Medicaid Managed Care Organization that they will be receiving. 

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The payment that is made in May is up to 40% of the program that tied to a hospital’s quality performance against a series of quality measures. Please see the current HDAA Quality Program Document (attached) for additional information. 

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• In-State Reinvestment: Hospitals are required to annually reinvest an amount equivalent to 75% its net new funding into the delivery of and access to healthcare services in New Mexico. This can include investments in operational costs, workforce recruitment, retention, compensation increases, etc., creation or expansion of services, community benefit activities, and capital investments. Hospitals will be required to report to the Health Care Authority annually evidencing their in-state reinvestment. More specifics are forthcoming on the parameters around this requirement. 

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Current Status

The Centers for Medicare and Medicaid Services has approved the tax waiver application (three-year duration) and the calendar year 2024 (July 1-December 31) pre-print. Approval for the calendar year 2025 pre-print renewal is pending.