Senate Bill No. 1550 proposes to subject children's general hospitals to the hospital provider tax starting July 1, 2026. This bill mandates that these hospitals, which were previously exempt from the tax, will now be required to pay the same effective rates as other hospitals for both inpatient and outpatient services. Specifically, the effective rates for FY 27 are set at 6% for inpatient services and 10.4858% for outpatient services, based on each hospital's audited net revenue from FY 16. The bill also removes the requirement for the Commissioner of Social Services to seek approval from the Centers for Medicare and Medicaid Services for this exemption, thereby streamlining the process.

Additionally, the bill includes a conforming change that clarifies the definition of children's general hospitals as health care facilities licensed as short-term children's hospitals, explicitly excluding specialty hospitals. The anticipated fiscal impact of this legislation is significant, with an estimated net revenue gain of $15.5 million annually for the state beginning in FY 27, resulting from the extension of the hospital provider tax to children's general hospitals. Overall, the bill aims to enhance revenue while ensuring that children's general hospitals contribute to the state's healthcare funding in a manner consistent with other hospitals.