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Long-Term Care Facility Assessment

Information for nursing facility residents and their families

Frequently asked questions

The 2003 Oregon Legislature enacted House Bill 2747 into law. House Bill 2747 charges assessment fees to some health care providers to help fund the cost of the Oregon Health Plan and nursing facility care for people who receive state assistance.

This fact sheet discusses the nursing facility assessment fee. The fee was supported by both the Oregon Health Care Association and by the Oregon Association of Senior and Health Services, the nursing facility trade organizations. Oregon has 143 licensed nursing facilities, of which 133 care for people who receive state assistance.

1. What is the Long-Term Care Facility Assessment?
The Long-Term Care Facility Assessment is a tax that Oregon nursing facilities will pay to the state. The tax is based on the number of days all residents stayed in the nursing facility. The tax will pay for an increase in the rates the state pays nursing homes for Medicaid.

Nursing facility residents do not owe any tax. The nursing facilities are responsible for the tax. 

Assisted living facilities, residential care facilities, adult foster homes, and group homes do not pay the tax. Only nursing facilities pay the tax.   

2. What will the tax be used for?
The tax money will raise Medicaid payments to nursing facilities for resident care.   

3. Do all nursing facilities pay the tax?
The law that created the tax (2003 House Bill 2747) exempts the Oregon Veterans' Home in The Dalles from payment of the tax.

DHS received federal approval to exempt two types of nursing facilities from the tax: (1) nursing facilities that are part of continuing care retirement communities (CCRCs), and (2) nursing facilities in which a very high percentage of the residents are Medicaid clients. The federal government approved these exemptions for all bed days starting October 1, 2003.

Exempt facilities do not have to pay taxes on quarters starting October 1 or after. Exempting High Medicaid Occupancy facilities from the tax will help the facilities provide high-quality care.

4. How much is the tax?
For the first six months that tax is $8.25 per resident day (July 1 - December 31, 2003). From January 1, 2004 through June 30, 2004, the rate is $8.85. After this, the rate is changed each July 1.

5. Are Medicare days taxed?
The tax is on all resident days. Days paid for by Medicare, Medicaid, and any other payer are included. 

6. What is the effective date of the tax?
The tax is currently in effect. The tax is owed on days back to July 1, 2003 and is due each quarter.

7. My nursing facility raised my rates, even though the tax has not gone into effect. Is this legal?
A nursing facility is allowed to raise rates for private-pay residents. The nursing facility must tell residents about the change before it happens. The state did not tell the nursing facilities to raise their rates. Any nursing facility that raised its rates did so on its own. 

8. If nursing facilities will get higher Medicaid payments, why should they charge private-pay residents more?
Not all Oregon nursing facilities will get more money when Medicaid rates go up. The increased payments are only for Medicaid bed days. Only nursing facilities with many Medicaid residents will benefit overall.

A nursing facility with few Medicaid residents will not break even. The facility will pay tax on all beds. It will only get a rate increase for its Medicaid residents.

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