HB 338

                                1  HOUSE BILL 338
                                2     57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4       Doreen Y. Gallegos and Natalie Figueroa and Sarah Silva
                                5  and Luis M. Terrazas
                                6
                                7
                                8
                                9
                                10  AN ACT
                                11   RELATING TO TAXATION; EXTENDING THE SUNSET DATE FOR A GROSS
                                12   RECEIPTS TAX DEDUCTION FOR HEALTH CARE PRACTITIONERS AND
                                13   EXPANDING THE DEDUCTION TO INCLUDE COINSURANCE.
                                14
                                15   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                16        SECTION 1.     Section 7-9-93 NMSA 1978 (being Laws 2004,
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                                17   Chapter 116, Section 6, as amended) is amended to read:
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                                18        "7-9-93.     DEDUCTION--GROSS RECEIPTS--CERTAIN RECEIPTS FOR
                                19   SERVICES PROVIDED BY HEALTH CARE PRACTITIONER OR ASSOCIATION OF
                                20   HEALTH CARE PRACTITIONERS.--
                                21  A.   Receipts of a health care practitioner or an
                                22   association of health care practitioners for commercial
                                23   contract services or medicare part C services paid by a managed
                                24   care organization or health care insurer may be deducted from
                                25   gross receipts if the services are within the scope of practice
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                                1    of the health care practitioner providing the service.
                                2    Receipts from fee-for-service payments by a health care insurer
                                3    may not be deducted from gross receipts.
                                4  B.   Prior to July 1, [2028] 2031, receipts from
                                5    coinsurance, a copayment or a deductible paid by an insured or
                                6    enrollee to a health care practitioner or an association of
                                7    health care practitioners for commercial contract services
                                8    pursuant to the terms of the insured's health insurance plan or
                                9    enrollee's managed care health plan may be deducted from gross
                                10   receipts if the services are within the scope of practice of
                                11   the health care practitioner providing the service.
                                12  C.   The deductions provided by this section shall be
                                13   applied only to gross receipts remaining after all other
                                14   allowable deductions available under the Gross Receipts and
                                15   Compensating Tax Act have been taken.
                                16  D.   A taxpayer allowed a deduction pursuant to this
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                                17   section shall report the amount of the deduction separately in
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                                18   a manner required by the department.
                                19  E.   The deductions provided by this section shall be
                                20   included in the tax expenditure budget pursuant to Section
                                21   7-1-84 NMSA 1978 with an analysis of the cost of the
                                22   deductions.
                                23  F.   As used in this section:
                                24  (1)   "association of health care practitioners"
                                25   means a corporation, an unincorporated business entity or other
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                                1    legal entity organized by, owned by or employing one or more
                                2    health care practitioners; provided that the entity is not:
                                3  (a)   an organization granted exemption
                                4    from the federal income tax by the United States commissioner
                                5    of internal revenue as organizations described in Section
                                6    501(c)(3) of the United States Internal Revenue Code of 1986,
                                7    as that section may be amended or renumbered; or
                                8  (b)   a health maintenance organization, a
                                9    hospital, a hospice, a nursing home or an entity that is solely
                                10   an outpatient facility or intermediate care facility licensed
                                11   pursuant to the [Public Health Act] Health Care Code;
                                12  (2)   "commercial contract services" means
                                13   health care services performed by a health care practitioner
                                14   pursuant to a contract with a managed care organization or
                                15   health care insurer other than those health care services
                                16   provided for medicare patients pursuant to Title 18 of the
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                                17   federal Social Security Act or for medicaid patients pursuant
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                                18   to Title 19 or Title 21 of the federal Social Security Act;
                                19  (3)   "copayment" or "coinsurance" means [a
                                20   fixed dollar] an amount that a health care insurer or managed
                                21   care health plan requires an insured or enrollee to pay upon
                                22   incurring an expense for receiving medical services;
                                23  (4)   "deductible" means the amount of covered
                                24   charges an insured or enrollee is required to pay in a plan
                                25   year for commercial contract services before the insured's
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                                1    health insurance plan or enrollee's managed care health plan
                                2    begins to pay for applicable covered charges;
                                3  (5)   "fee-for-service" means payment for health
                                4    care services by a health care insurer for covered charges
                                5    under an indemnity insurance plan;
                                6  (6)   "health care insurer" means a person that:
                                7  (a)   has a valid certificate of authority
                                8    in good standing pursuant to the New Mexico Insurance Code to
                                9    act as an insurer, a health maintenance organization or a
                                10   nonprofit health care plan or prepaid dental plan; and
                                11  (b)   contracts to reimburse licensed
                                12   health care practitioners for providing basic health services
                                13   to enrollees at negotiated fee rates;
                                14  (7)   "health care practitioner" means:
                                15  (a)   a chiropractic physician licensed
                                16   pursuant to the provisions of the Chiropractic Physician
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                                17   Practice Act;
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                                18  (b)   a dentist or dental hygienist
                                19   licensed pursuant to the Dental Health Care Act;
                                20  (c)   a doctor of oriental medicine
                                21   licensed pursuant to the provisions of the Acupuncture and
                                22   Oriental Medicine Practice Act;
                                23  (d)   an optometrist licensed pursuant to
                                24   the provisions of the Optometry Act;
                                25  (e)   an osteopathic physician licensed
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                                1    pursuant to the provisions of the Medical Practice Act;
                                2  (f)   a physical therapist licensed
                                3    pursuant to the provisions of the Physical Therapy Act;
                                4  (g)   a physician or physician assistant
                                5    licensed pursuant to the provisions of the Medical Practice
                                6    Act;
                                7  (h)   a podiatric physician licensed
                                8    pursuant to the provisions of the Podiatry Act;
                                9  (i)   a psychologist licensed pursuant to
                                10   the provisions of the Professional Psychologist Act;
                                11  (j)   a registered lay midwife registered
                                12   by the department of health;
                                13  (k)   a registered nurse or licensed
                                14   practical nurse licensed pursuant to the provisions of the
                                15   Nursing Practice Act;
                                16  (l)   a registered occupational therapist
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                                17   licensed pursuant to the provisions of the Occupational Therapy
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                                18   Act;
                                19  (m)   a respiratory care practitioner
                                20   licensed pursuant to the provisions of the Respiratory Care
                                21   Act;
                                22  (n)   a speech-language pathologist or
                                23   audiologist licensed pursuant to the Speech-Language Pathology,
                                24   Audiology and Hearing Aid Dispensing Practices Act;
                                25  (o)   a professional clinical mental
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                                1    health counselor, marriage and family therapist or professional
                                2    art therapist licensed pursuant to the provisions of the
                                3    Counseling and Therapy Practice Act who has obtained a master's
                                4    degree or a doctorate;
                                5  (p)   an independent social worker
                                6    licensed pursuant to the provisions of the Social Work Practice
                                7    Act; and
                                8  (q)   a clinical laboratory that is
                                9    accredited pursuant to 42 U.S.C. Section 263a but that is not a
                                10   laboratory in a physician's office or in a hospital defined
                                11   pursuant to 42 U.S.C. Section 1395x;
                                12  (8)   "managed care health plan" means a health
                                13   care plan offered by a managed care organization that provides
                                14   for the delivery of comprehensive basic health care services
                                15   and medically necessary services to individuals enrolled in the
                                16   plan other than those services provided to medicare patients
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                                17   pursuant to Title 18 of the federal Social Security Act or to
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                                18   medicaid patients pursuant to Title 19 or Title 21 of the
                                19   federal Social Security Act;
                                20  (9)   "managed care organization" means a person
                                21   that provides for the delivery of comprehensive basic health
                                22   care services and medically necessary services to individuals
                                23   enrolled in a plan through its own employed health care
                                24   providers or by contracting with selected or participating
                                25   health care providers.   "Managed care organization" includes
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                                1    only those persons that provide comprehensive basic health care
                                2    services to enrollees on a contract basis, including the
                                3    following:
                                4  (a)   health maintenance organizations;
                                5  (b)   preferred provider organizations;
                                6  (c)   individual practice associations;
                                7  (d)   competitive medical plans;
                                8  (e)   exclusive provider organizations;
                                9  (f)   integrated delivery systems;
                                10  (g)   independent physician-provider
                                11   organizations;
                                12  (h)   physician hospital-provider
                                13   organizations; and
                                14  (i)   managed care services organizations;
                                15   and
                                16  (10)   "medicare part C services" means services
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                                17   performed pursuant to a contract with a managed health care
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                                18   provider for medicare patients pursuant to Title 18 of the
                                19   federal Social Security Act."
                                20  SECTION 2.    EFFECTIVE DATE.--The effective date of the
                                21   provisions of this act is July 1, 2026.
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