Senate Bill No. 1550 proposes to subject children's general hospitals to the hospital provider tax starting July 1, 2026. This bill mandates that any children's general hospitals that were previously exempt from this tax must now pay it on both inpatient and outpatient hospital services at the same effective rates as other hospitals, which are set at 6% for inpatient services and 10.4858% for outpatient services based on each hospital's audited net revenue from fiscal year 2016. The bill also removes the requirement for the Commissioner of Social Services to seek approval from the Centers for Medicare and Medicaid Services to exempt children's general hospitals from the tax.

Additionally, the bill clarifies the definitions of "children's general hospital" and "specialty hospital," ensuring that children's general hospitals are recognized as health care facilities licensed as short-term children's hospitals, while 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, generated from the hospital provider tax on children's general hospitals, alongside a corresponding hospital supplemental payment of $23 million through the Department of Social Services.