In order to raise $430 million, the governor of New Jersey has proposed to tax hospitals about $1,400 a bed. Half the funds would be used to increase matching funds from the federal government under Medicaid. (Source)
Many states require providers, including nursing homes, to pay a tax or “quality assessment fee.” States use this money to obtain matching funds from the federal government under the 50/50 Medicaid match system. There is currently no provider tax assessed against nursing homes in Texas. (Source)
Medicaid is funded through a variety of ways, and the provider tax is one. For those who want to learn more about how Medicaid is funded, I recommend a 2004 report titled, The Basics: Medicaid Financing (PDF). From the section on provider taxes:
Provider taxes are a mechanism states have used to generate the state matching funds needed to receive FFP. Beginning in the mid-1980s, states began using revenues from the imposition of fees, assessments, and other taxes on health care providers to generate the state match. In 1991, Congress placed limits on the use of provider taxes by requiring that the taxes be imposed uniformly on all providers (for example, hospitals, nursing facilities, and managed care organizations) and by prohibiting providers from being “held harmless for the costs of the tax,” that is, guaranteed that a portion of the tax amount would be returned to the provider after the federal matching funds were received.