No changes in committee as FRA bill heads to Missouri House for debate

Parson has warned of $722 million in cuts if bill not passed before new budget year begins

By: - June 29, 2021 4:51 pm

House Budget Committee Chairman Cody Smith on Tuesday explains the need for quick action on the reimbursement allowance tax extension (photo by Tim Bommel/Missouri House Communications).

After receiving a warning that any delay beyond Wednesday for the bill extending medical provider taxes could be catastrophic, the House Budget Committee voted 27-2 to send it to the full chamber without any changes from the version passed last week in the state Senate.

The new state fiscal year begins Thursday, and Gov. Mike Parson warned lawmakers last week that there was no time for “back and forth” negotiations. Unless the bill is approved by the time he signs the spending bills for the new year, Parson vowed to cut $722 million, much of it from higher Medicaid rates supported by the provider taxes.

“Considering the situation we are in here, we are faced with one choice, and one choice only, and that is to keep the FRA intact,” House Budget Committee Chairman Cody Smith, R-Carthage, said just before the vote.

Lawmakers are in a special session called by Parson because they failed to pass a bill extending the taxes in their regular session. The taxes on hospitals, nursing homes, pharmacies and ambulances are called the federal reimbursement allowance, or FRA, and the $1.6 billion expected from the taxes equals or exceeds the amount of state general revenue in the $12 billion program.

During the regular session the bill became embroiled in abortion politics, first with an amendment from Sen. Paul Wieland, R-Imperial, to limit the types of contraceptives the program will provide. Later, Sen. Bob Onder, R-Lake St. Louis, added provisions intended to bar Planned Parenthood from being a Medicaid provider.

The version approved in the Senate last week extends the taxes for three years. It dropped any reference to Planned Parenthood and included only a restatement of the state’s already existing ban on using public funds to pay for abortions in place of Wieland’s language.

Missouri Right to Life, which is making the bill a test of lawmakers’ fealty to its agenda, opposes the version approved by the committee.

“When this FRA goes to the governor, when the Senate adjourns, we have all agreed to let Planned Parenthood get our state and federal tax dollars,” said Susan Klein, executive director of Missouri Right to Life.

Representatives of providers who pay the taxes and rely on Medicaid payments told the committee it would be difficult to stay in business if payment rates are cut due to failure of the bill.

Of the 516 nursing homes in the state, only 17 do not accept Medicaid patients, said Nikki Strong, representing the Missouri Health Care Association. Approximately 40 percent of the people receiving skilled nursing care are on Medicaid, she said.

“Without the FRA, you would not be able to have a nursing home that could stay in business,” she said.

The Medicaid program is a shared responsibility of state and federal governments. Missouri receives almost $2 in federal support for every $1 it spends, Smith told the committee. That means the $1.6 billion in taxes draws $2.9 bill in federal support.

Without that money, he said, “we would have to take away other revenue. The result, he said, would be “catastrophic to the budget.”

The committee held a hearing on a separate bill that would block Planned Parenthood from providing services under the Medicaid program, but its fate is uncertain. The committee approved it 20-9 and it is expected to be debated on the House floor, but the state Senate is not scheduled to return to consider any bills that originate in the House.

The bill, from state Rep. Nick Schroer, R-O’Fallon, reaches into the history of Planned Parenthood and its founder, Margaret Sanger, for reasons to block its participation in Medicaid.

Along with banning payments to any organization that provide abortions or affiliates, the bill would bar Medicaid from accepting as a provider any organization that “was founded by a person who supported eugenics as the solution for racial, political, and social problems and who advocated for the use of birth control for ‘the elimination of the unfit’ and stopping ‘the reproduction of the unfit.’”

The views of the founder make the organization unacceptable as a Medicaid provider regardless of its current official views, Schroer said.

“I don’t know how you cut ties to a founder of an organization without cutting ties to an organization,” he said.

State Rep. Sarah Unsicker, D-Shrewsbury, speaks Tuesday during a House Budget Committee hearing on reimbursement allowance taxes. (Tim Bommel/Missouri House)

Democrats attacked the bill as an overreaching attempt to nullify federal law requiring medically qualified providers to have access to the Medicaid system.

“I am very concerned about losing our Medicaid funding and we are here to protect our Medicaid funding,” said state Rep. Sarah Unsicker, D-Shrewsbury.

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Rudi Keller
Rudi Keller

Rudi Keller covers the state budget, energy and the legislature. He’s spent 22 of his 30 years in journalism covering Missouri government and politics, most recently as the news editor of the Columbia Daily Tribune. Keller has won awards for spot news and investigative reporting.

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