Daily Tax Report: State

Texas, Other States Lose $479 Million in Obamacare Provider Fees

July 31, 2020, 5:01 PM

The Fifth Circuit on Friday upheld the Obamacare provider fee that states pay to the IRS on behalf of Medicaid Managed Care Organizations in order to receive federal reimbursement for MCO payments.

The fee is a valid federal tax that doesn’t violate the U.S. Constitution’s spending clause, it said.

The decision by the U.S. Court of Appeals for the Fifth Circuit overturns a lower court ruling that would have required the federal government to repay Texas, Kansas, Louisiana, Indiana, Wisconsin, and Nebraska at least $479 million it collected under the Affordable Care Act’s Section 9010.

Section 9010 is valid spending...

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