MCO - Managed Care Organization

The imposition of certain special taxes on those persons who provide health care related services within the State. The measure of the taxes is gross receipts (accounts received or receivable) from the provision of various health care services and sales of related items within West Virginia.

The West Virginia Tax Division previously provided guidance on the filing and payment of the tax on the provision of Managed Care. This guidance is issued to provide instruction on calculating the tax in any tax year that is less than 12 months (a “short period return”). If a taxpayer has an annual period ending December 31, 2020, the 2020 annual return is a short period return of six months because the tax was imposed beginning July 1, 2020.

Special Instructions for Payment of Annual Tax Due on Organizations Providing Managed Care for the 2020 Tax Year

Short Period Return Calculator

What is it?

  • The passage of Senate Bill 719 established tax rates on the provisions of two particular services: Medicaid membership and Non-Medicaid membership in managed care plans. The rates were determined based upon the number of members of a plan for each month or part of a month on a graduated scale. The following rates will apply from July 1, 2022 until June 30, 2023:
  • (1) Tier I - $36.26 for each Medicaid member-month under 250,000;
  • (2) Tier II - $20.72 for each Medicaid member-month between 250,000 and 500,000;
  • (3) Tier III - $1.036 for each Medicaid member-month greater than 500,000;
  • (4) Tier IV - 25.9 cents for each non-Medicaid member-month under 150,000; and
  • (5) Tier V - 10.36 cents for each non-Medicaid member-month of 150,000 or more.

Who is affected?

Managed Care providers offering Medicaid membership plans and Non-Medicaid memberships plans.

What do taxpayers have to do?

Electronic filing and payment of tax is required. Much like broad-based healthcare, taxpayers must file monthly estimated returns and an annual return.

How do I calculate my estimated payment?

The Tax Division has provided a Monthly Estimated Payment Calculator for taxpayer use.

Special Instructions for Estimated Payment of Tax Due on Organizations Providing Managed Care

When do I file my annual return?

This will be a fiscal year return with the due date on July 31st for the fiscal year ending each June 30th.