Legislation would remove tax on ambulance providers, update state law

LANSING, Mich. — Today Sen. Steve Bieda (D–Warren) introduced legislation to eliminate the Quality Assurance Assessment Program (QAAP), or taxes charged to medical providers, after local communities found that the additional tax was overly burdensome and unevenly applied.

Communities with public ambulance providers were negatively affected by the tax after it was applied to all local tax revenue — instead of just ambulatory services — while private ambulance providers only paid taxes on services they provided.

“This is an example of a law with good intentions, but unintended consequences,” Sen. Bieda said. “This puts a huge strain on local budgets, including police and fire departments that already operate on shoestring budgets.”

Senate Bill 403 would remove the tax on ambulance providers in state law. The state Department of Health and Human Services budget already removed authorization for ambulance QAAPs, but that proposal would not be legally binding until state law is updated to reflect the change.

“Unfortunately, the costs for local communities began to exceed the benefits of the program, and I think we need to hit the pause button until we can find a better solution,” Sen. Bieda said.

In 2002, the State of Michigan began assessing QAAPs on hospitals, nursing homes and Medicaid-managed care organizations. The legislature broadened this tax to ambulance providers after the federal government expanded a matching program to those providers to increase the amount of funding for their services.