Summary:

 Senate Bill 455 (SB 455) expands the gross receipts tax deduction for health care practitioners to include amounts received from coinsurance payments made by patients. Currently, deductions apply only to commercial contract services and Medicare Part C payments made by managed care organizations and health insurers. The bill allows practitioners to also deduct coinsurance payments received from patients under commercial insurance plans. SB 455 takes effect on July 1, 2025. 

Legislation Overview:

 Senate Bill 455 (SB 455) amends Section 7-9-93 NMSA 1978, which provides gross receipts tax deductions for certain health care practitioners. Under current law, health care practitioners may deduct from gross receipts tax any payments received for commercial contract services or Medicare Part C services if paid by a managed care organization or health insurer. SB 455 extends this deduction to include coinsurance payments made directly by patients, provided that the payments are part of a commercial insurance contract. The bill clarifies that copayments, deductibles, and fee-for-service payments from insurers remain ineligible for deduction.

Implications

Expanding the gross receipts tax deduction to include coinsurance payments could reduce tax liabilities for health care practitioners, potentially lowering costs for private medical practices and encouraging participation in commercial insurance networks. The fiscal impact on the state depends on the total amount of deductible coinsurance payments, which would reduce gross receipts tax revenue collected from health care providers. The bill does not extend the deduction to copayments or deductibles, limiting the scope of the expansion. Patients who pay coinsurance amounts would not see a direct financial benefit, but practitioners may experience lower overall tax burdens, potentially leading to lower costs for services. 

Current Law:

 Under current law, health care practitioners can deduct gross receipts for payments received for commercial contract services and Medicare Part C services, but only if paid by a managed care organization or health insurer. Payments made directly by patients, including coinsurance payments, are currently subject to gross receipts tax.