Missouri House passes Medicaid provider tax bill, preventing major budget cuts

Senate adjourns without action on separate bill to deny public funds to Planned Parenthood

By: - June 30, 2021 4:10 pm

House Budget Chairman Cody Smith, R-Carthage (photo by Tim Bommel/Missouri House Communications).

With fewer than 12 hours to spare before the start of a new fiscal year, the Missouri House on Wednesday approved a bill extending medical provider taxes essential to balancing the budget, forestalling more than $700 million in cuts planned by Gov. Mike Parson.

Divisions over how and whether to add provisions sought by anti-abortion lawmakers killed the renewal bill in the regular session that ended May 14. And while the taxes don’t expire until Sept. 30, Parson last week demanded that lawmakers pass it before he signs appropriation bills.

There was no floor debate on the tax extension bill before the 140-13 vote to approve legislation passed in the Senate last week. House Budget Committee Chairman Cody Smith, R-Carthage, told colleagues the measure was essential for the state to function smoothly.

The House did pass a bill to revoke Planned Parenthood’s status as an approved Medicaid provider. The Senate, however, adjourned and ended the special session without considering the bill. 

The taxes on hospitals, nursing homes, pharmacies and ambulances are called the federal reimbursement allowance, or FRA, with the money used to support the state’s costs for Medicaid. The $1.6 billion expected from the taxes equals or exceeds the amount of state general revenue in the $12 billion Medicaid program.

“If we do not renew the FRA our budget would be out of balance starting tomorrow,” Smith said, “and it would be catastrophic.”

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.

After Wednesday’s vote, Democratic leaders called the final result a victory. The bill includes only a restatement of the state’s current ban on using public funds to pay for abortions and does not attempt to bar Planned Parenthood as a Medicaid provider.

“The fact that we were here wasting taxpayer money in a special session when we could have done this in the regular session is shameful,” said House Minority Leader Crystal Quade, D-Springfield.

Passage of the bill paves the way for Parson to sign the $35.7 billion budget approved by lawmakers. With record tax surpluses and large sums of unspent money from federal COVID-19 relief in the treasury, Parson will not need to make significant cuts to make spending match revenue.

Nursing homes, home care providers and agencies that support the developmentally disabled are all slated for increases in the coming fiscal year. State colleges and universities will see a boost in state support, as will public schools, which will receive a bigger check for student transportation.

The biggest uncertainty heading into the House debate was whether anti-abortion lawmakers woud try to add provisions about contraceptives or Planned Parenthood to the reimbursement allowance renewal. Any change from the Senate-passed legislation would have left the bill in limbo and gone beyond the deadline imposed by Parson.

Missouri Right to Life, one of the most powerful advocacy groups supporting Republican candidates, opposed the bill without those provisions. To quiet that opposition, House leaders allowed about two hours of debate on a bill from Rep. Nick Schroer, R-O’Fallon, that would deny public funds “to any abortion facility, or to any affiliate or associate of such abortion facility” and denying payment to Planned Parenthood for serving Medicaid clients.

“That bill was the opportunity to conitnue this effort of ours to keep state taxpayer dollars out of abortion providers’ and their affiliate’s facilities, while at the same time allowing us to take up and pass the FRA bill and keep our budget intact heading into the next fiscal year,” Smith said after the debate.

During debate on Schroer’s bill, Republican supporters focused on their desire to end all abortions in Missouri. There is only one clinic in the state that offers abortions, the Reproductive Health Services affiliate of Planned Parenthood in St. Louis.

“This is a solution that allows us to maintain our federal funding and makes sure that no state dollars and no federal dollars in this state will go to support Planned Parenthood,” said state Rep. Mary Elizabeth Coleman, R-Arnold.

Democrats said the bill would put the state out of compliance with federal Medicaid regulations, potentially resulting in a loss of federal funding. State Rep. Ashley Aune, D-Kansas City, said denying money to Planned Parenthood while the state supports “pregnancy resource centers,” many of which have a religious affiliation, will mean less support for women who need family planning services.

“Jesus is not going to fix a pregnancy, y’all,” Aune said.

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Rudi Keller
Rudi Keller

Rudi Keller covers the state budget and the legislature. A graduate of the University of Missouri School of Journalism, he spent 22 of his 32 years in journalism covering Missouri government and politics for the Columbia Daily Tribune, where he won awards for spot news and investigative reporting.