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HOUSE BILL 344
57
TH LEGISLATURE
-
STATE
OF
NEW
MEXICO
-
FIRST SESSION
,
2025
INTRODUCED BY
Dayan Hochman-Vigil and Meredith A. Dixon
AN ACT
RELATING TO TAXATION; PROVIDING A GROSS RECEIPTS TAX DEDUCTION
FOR THE SALE OF MEDICAL EQUIPMENT, SUPPLIES AND DRUGS;
PROVIDING A GROSS RECEIPTS TAX DEDUCTION TO RECEIPTS FOR
CERTAIN HEALTH CARE SERVICES, EXCEPT FOR THOSE FOR MEDICAID
PATIENTS; REMOVING THE SUNSET DATE OF A GROSS RECEIPTS TAX
DEDUCTION FOR RECEIPTS FROM COPAYMENTS OR DEDUCTIBLES PAID BY
AN INSURED OR ENROLLEE TO A HEALTH CARE PRACTITIONER OR AN
ASSOCIATION OF HEALTH CARE PRACTITIONERS; EXTENDING A GROSS
RECEIPTS TAX DEDUCTION TO RECEIPTS FROM A PATIENT PAID TO A
HEALTH CARE PRACTITIONER OR AN ASSOCIATION OF HEALTH CARE
PRACTITIONERS FOR HEALTH CARE SERVICES THAT ARE NOT PERFORMED
PURSUANT TO A CONTRACT WITH A MANAGED CARE ORGANIZATION OR
HEALTH CARE INSURER; PROVIDING THAT A HEALTH CARE PROVIDER
RECEIVING MEDICAID REIMBURSEMENT SHALL BE REIMBURSED FOR ALL
APPLICABLE GROSS RECEIPTS TAXES THAT THE PROVIDER IS REQUIRED
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TO PAY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 7-9-93 NMSA 1978 (being Laws 2004,
Chapter 116, Section 6, as amended) is amended to read:
"7-9-93. DEDUCTION--GROSS RECEIPTS--CERTAIN RECEIPTS FOR
SERVICES PROVIDED BY HEALTH CARE PRACTITIONER OR ASSOCIATION OF
HEALTH CARE PRACTITIONERS.--
A. Receipts of a health care practitioner or an
association of health care practitioners for commercial
contract services or medicare part C services paid by a managed
care organization or health care insurer may be deducted from
gross receipts if the services are within the scope of practice
of the health care practitioner providing the service.
[Receipts from fee-for-service payments by a health care
insurer may not be deducted from gross receipts. ]
B. [Prior to July 1, 2028 ] Receipts from a
copayment or deductible paid by an insured or enrollee to a
health care practitioner or an association of health care
practitioners for commercial contract services pursuant to the
terms of the insured's health insurance plan or enrollee's
managed care health plan may be deducted from gross receipts if
the services are within the scope of practice of the health
care practitioner providing the service.
C. Receipts from a patient to a health care
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practitioner or an association of health care practitioners for
health care services that are not performed pursuant to a
contract with a managed care organization or health care
insurer may be deducted from gross receipts if the services are
within the scope of practice of the health care practitioner
providing the service.
[C.] D. The deductions provided by this section
shall be applied only to gross receipts remaining after all
other allowable deductions available under the Gross Receipts
and Compensating Tax Act have been taken, except for deductions
pursuant to Section 7-9-93.1 NMSA 1978.
[D.] E. A taxpayer allowed a deduction pursuant to
this section shall report the amount of the deduction
separately in a manner required by the department.
[E. The department shall compile an annual report
on the deductions provided by this section that shall include
the number of taxpayers that claimed the deductions, the
aggregate amount of deductions claimed and any other
information necessary to evaluate the effectiveness of the
deductions. The department shall present the report to the
revenue stabilization and tax policy committee and the
legislative finance committee with an analysis of the cost of
the deductions.]
F. The deductions provided by this section shall be
included in the tax expenditure budget pursuant to Section
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7-1-84 NMSA 1978, including the number of taxpayers that
claimed each deduction, the aggregate amount of deductions
claimed and any other information necessary to evaluate the
cost and effectiveness of the deductions.
[F.] G. As used in this section:
(1) "association of health care practitioners"
means a corporation, an unincorporated business entity or other
legal entity organized by, owned by or employing one or more
health care practitioners; provided that the entity is not:
(a) an organization granted exemption
from the federal income tax by the United States commissioner
of internal revenue as organizations described in Section
501(c)(3) of the United States Internal Revenue Code of 1986,
as that section may be amended or renumbered; or
(b) a health maintenance organization or
a hospital, hospice, nursing home or an entity that is solely
an outpatient facility or intermediate care facility licensed
[pursuant to the Public Health Act ] by the health care
authority;
(2) "commercial contract services" means
health care services performed by a health care practitioner
pursuant to a contract with a managed care organization or
health care insurer other than those health care services
provided for medicare patients pursuant to Title 18 of the
federal Social Security Act or for medicaid patients pursuant
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to Title 19 or Title 21 of the federal Social Security Act;
(3) "copayment" means a fixed dollar amount
that a health care insurer or managed care health plan requires
an insured or enrollee to pay upon incurring an expense for
receiving medical services;
(4) "deductible" means the amount of covered
charges an insured or enrollee is required to pay in a plan
year for commercial contract services before the insured's
health insurance plan or enrollee's managed care health plan
begins to pay for applicable covered charges;
[(5) "fee-for-service" means payment for
health care services by a health care insurer for covered
charges under an indemnity insurance plan;
(6)] (5) "health care insurer" means a person
that:
(a) has a valid certificate of authority
in good standing pursuant to the New Mexico Insurance Code to
act as an insurer, health maintenance organization or nonprofit
health care plan or prepaid dental plan; and
(b) contracts to reimburse licensed
health care practitioners for providing basic health services
to enrollees at negotiated fee rates;
[(7)] (6) "health care practitioner" means:
(a) a chiropractic physician licensed
pursuant to the provisions of the Chiropractic Physician
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Practice Act;
(b) a dentist or dental hygienist
licensed pursuant to the Dental Health Care Act;
(c) a doctor of oriental medicine
licensed pursuant to the provisions of the Acupuncture and
Oriental Medicine Practice Act;
(d) an optometrist licensed pursuant to
the provisions of the Optometry Act;
(e) an osteopathic physician licensed
pursuant to the provisions of the Medical Practice Act;
(f) a physical therapist licensed
pursuant to the provisions of the Physical Therapy Act;
(g) a physician or physician assistant
licensed pursuant to the provisions of the Medical Practice
Act;
(h) a podiatric physician licensed
pursuant to the provisions of the Podiatry Act;
(i) a psychologist licensed pursuant to
the provisions of the Professional Psychologist Act;
(j) a registered lay midwife registered
by the department of health;
(k) a registered nurse or licensed
practical nurse licensed pursuant to the provisions of the
Nursing Practice Act;
(l) a registered occupational therapist
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licensed pursuant to the provisions of the Occupational Therapy
Act;
(m) a respiratory care practitioner
licensed pursuant to the provisions of the Respiratory Care
Act;
(n) a speech-language pathologist or
audiologist licensed pursuant to the Speech-Language Pathology,
Audiology and Hearing Aid Dispensing Practices Act;
(o) a professional clinical mental
health counselor, marriage and family therapist or professional
art therapist licensed pursuant to the provisions of the
Counseling and Therapy Practice Act who has obtained a master's
degree or a doctorate;
(p) an independent social worker
licensed pursuant to the provisions of the Social Work Practice
Act; and
(q) a clinical laboratory that is
accredited pursuant to 42 U.S.C. Section 263a but that is not a
laboratory in a physician's office or in a hospital defined
pursuant to 42 U.S.C. Section 1395x;
[(8)] (7) "managed care health plan" means a
health care plan offered by a managed care organization that
provides for the delivery of comprehensive basic health care
services and medically necessary services to individuals
enrolled in the plan other than those services provided to
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medicare patients pursuant to Title 18 of the federal Social
Security Act [or to medicaid patients pursuant to Title 19 or
Title 21 of the federal Social Security Act ];
[(9)] (8) "managed care organization" means a
person that provides for the delivery of comprehensive basic
health care services and medically necessary services to
individuals enrolled in a plan through its own employed health
care providers or by contracting with selected or participating
health care providers. "Managed care organization" includes
only those persons that provide comprehensive basic health care
services to enrollees on a contract basis, including the
following:
(a) health maintenance organizations;
(b) preferred provider organizations;
(c) individual practice associations;
(d) competitive medical plans;
(e) exclusive provider organizations;
(f) integrated delivery systems;
(g) independent physician-provider
organizations;
(h) physician hospital-provider
organizations; and
(i) managed care services organizations;
and
[(10)] (9) "medicare part C services" means
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services performed pursuant to a contract with a managed health
care provider for medicare patients pursuant to Title 18 of the
federal Social Security Act."
SECTION 2. A new section of the Gross Receipts and
Compensating Tax Act, Section 7-9-93.1 NMSA 1978, is enacted to
read:
"7-9-93.1. [NEW MATERIAL ] DEDUCTION--GROSS RECEIPTS--
CERTAIN RECEIPTS FOR SERVICES PROVIDED BY HEALTH CARE
PRACTITIONER OR ASSOCIATION OF HEALTH CARE PRACTITIONERS EXCEPT
FOR MEDICAID PATIENTS--MEDICAL EQUIPMENT, SUPPLIES AND DRUGS.--
A. Except for those receipts that may be deducted
from gross receipts pursuant to Section 7-9-93 NMSA 1978,
receipts of a health care practitioner or an association of
health care practitioners for health care services, other than
services provided for medicaid patients pursuant to Title 19 or
Title 21 of the federal Social Security Act, performed by a
health care practitioner may be deducted from gross receipts if
the services are within the scope of practice of the health
care practitioner providing the service.
B. Receipts from the sale of medical equipment and
medical supplies to a health care practitioner or an
association of health care practitioners may be deducted from
gross receipts if the medical equipment and medical supplies
are regularly used within the practice of the health care
practitioner or association of health care practitioners.
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C. Receipts from the sale of medical drugs to a
health care practitioner or an association of health care
practitioners may be deducted from gross receipts if the
medical drugs are regularly used for the treatment of patients
within the practice of the health care practitioner or
association of health care practitioners.
D. The deductions provided by this section shall be
applied only to gross receipts remaining after all other
allowable deductions available under the Gross Receipts and
Compensating Tax Act have been taken.
E. A taxpayer allowed a deduction pursuant to this
section shall report the amount of the deduction separately in
a manner required by the department.
F. The deduction provided by this section shall be
included in the tax expenditure budget pursuant to Section
7-1-84 NMSA 1978, including the number of taxpayers that
claimed each deduction, the aggregate amount of deductions
claimed and any other information necessary to evaluate the
cost and effectiveness of the deductions.
G. As used in this section:
(1) "association of health care practitioners"
means a corporation, unincorporated business entity or other
legal entity organized by, owned by or employing one or more
health care practitioners; provided that the entity is not:
(a) an organization granted exemption
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from the federal income tax by the United States commissioner
of internal revenue as organizations described in Section
501(c)(3) of the United States Internal Revenue Code of 1986,
as that section may be amended or renumbered; or
(b) a health maintenance organization or
a hospital, hospice, nursing home or an entity that is solely
an outpatient facility or intermediate care facility licensed
by the health care authority;
(2) "copayment" means a fixed dollar amount
that a health care insurer or managed care health plan requires
an insured or enrollee to pay upon incurring an expense for
receiving medical services;
(3) "deductible" means the amount of covered
charges an insured or enrollee is required to pay in a plan
year for commercial contract services before the insured's
health insurance plan or enrollee's managed care health plan
begins to pay for applicable covered charges;
(4) "health care insurer" means a person that:
(a) has a valid certificate of authority
in good standing pursuant to the New Mexico Insurance Code to
act as an insurer, health maintenance organization or nonprofit
health care plan or prepaid dental plan; and
(b) contracts to reimburse licensed
health care practitioners for providing basic health services
to enrollees at negotiated fee rates;
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(5) "health care practitioner" means:
(a) a chiropractic physician licensed
pursuant to the provisions of the Chiropractic Physician
Practice Act;
(b) a dentist or dental hygienist
licensed pursuant to the Dental Health Care Act;
(c) a doctor of oriental medicine
licensed pursuant to the provisions of the Acupuncture and
Oriental Medicine Practice Act;
(d) an optometrist licensed pursuant to
the provisions of the Optometry Act;
(e) an osteopathic physician licensed
pursuant to the provisions of the Medical Practice Act;
(f) a physical therapist licensed
pursuant to the provisions of the Physical Therapy Act;
(g) a physician or physician assistant
licensed pursuant to the provisions of the Medical Practice
Act;
(h) a podiatric physician licensed
pursuant to the provisions of the Podiatry Act;
(i) a psychologist licensed pursuant to
the provisions of the Professional Psychologist Act;
(j) a registered lay midwife registered
by the department of health;
(k) a registered nurse or licensed
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practical nurse licensed pursuant to the provisions of the
Nursing Practice Act;
(l) a registered occupational therapist
licensed pursuant to the provisions of the Occupational Therapy
Act;
(m) a respiratory care practitioner
licensed pursuant to the provisions of the Respiratory Care
Act;
(n) a speech-language pathologist or
audiologist licensed pursuant to the Speech-Language Pathology,
Audiology and Hearing Aid Dispensing Practices Act;
(o) a professional clinical mental
health counselor, marriage and family therapist or professional
art therapist licensed pursuant to the provisions of the
Counseling and Therapy Practice Act who has obtained a master's
degree or a doctorate;
(p) an independent social worker
licensed pursuant to the provisions of the Social Work Practice
Act;
(q) a clinical laboratory that is
accredited pursuant to 42 U.S.C. Section 263a but that is not a
laboratory in a physician's office or in a hospital defined
pursuant to 42 U.S.C. Section 1395x; and
(r) a naturopathic doctor licensed
pursuant to the provisions of the Naturopathic Doctors'
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Practice Act;
(6) "managed care health plan" means a health
care plan offered by a managed care organization that provides
for the delivery of comprehensive basic health care services
and medically necessary services to individuals enrolled in the
plan other than those services provided to medicare patients
pursuant to Title 18 of the federal Social Security Act or to
medicaid patients pursuant to Title 19 or Title 21 of the
federal Social Security Act;
(7) "managed care organization" means a person
that provides for the delivery of comprehensive basic health
care services and medically necessary services to individuals
enrolled in a plan through its own employed health care
providers or by contracting with selected or participating
health care providers. "Managed care organization" includes
only those persons that provide comprehensive basic health care
services to enrollees on a contract basis, including the
following:
(a) health maintenance organizations;
(b) preferred provider organizations;
(c) individual practice associations;
(d) competitive medical plans;
(e) exclusive provider organizations;
(f) integrated delivery systems;
(g) independent physician-provider
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organizations;
(h) physician hospital-provider
organizations; and
(i) managed care services organizations;
(8) "medical equipment and supplies" means
items or devices that are primarily and customarily used to
serve a medical purpose for a course of medical treatment; and
(9) "medicare part C services" means services
performed pursuant to a contract with a managed health care
provider for medicare patients pursuant to Title 18 of the
federal Social Security Act."
SECTION 3. A new section of the Public Assistance Act is
enacted to read:
"[NEW MATERIAL] REIMBURSEMENT FOR GROSS RECEIPTS
TAXES.--When a health care provider receives medicaid
reimbursement for providing health care services to a
recipient, the health care provider shall be reimbursed for all
applicable gross receipts taxes that the health care provider
is required to pay. As used in this section, "medicaid" means
the federal-state program administered by the authority
pursuant to Title 19 or Title 21 of the federal Social Security
Act."
SECTION 4. EFFECTIVE DATE.--The effective date of the
provisions of this act is July 1, 2025.
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