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Talks continue on renewing major Medicaid tax as Parson vows budget cuts next month

Talks continue on renewing major Medicaid tax as Parson vows budget cuts next month


JEFFERSON CITY — The top budget official in the Missouri House said Tuesday that negotiators were making progress in talks to extend a tax on health care providers that covers major portions of the state’s Medicaid program.

House Budget Chairman Cody Smith, R-Carthage, told the Post-Dispatch he was encouraged by recent discussions over the Federal Reimbursement Allowance, which expires Sept. 30.

“We’re making progress towards acting relatively quickly to renew the FRA,” Smith said. “I think it’s clear that we need to address this as quickly as possible.”

At issue are two provisions sought by conservatives: restricting Medicaid funding from covering certain contraception and restricting funds from abortion provider Planned Parenthood.

With conservatives pushing those measures, lawmakers left Jefferson City last month without a deal to extend the tax, concluding their annual legislative session. Approval of the FRA legislation was, until this session, considered routine and necessary to ensure the continuity of the state’s Medicaid program.

Gov. Mike Parson, a Republican, has vowed budget cuts if no deal to extend the tax is reached by July 1, the start of the new fiscal year.

That means lawmakers would have to return to the capital city this month for a special session to approve the FRA in order to meet that deadline.

“I believe the House can,” Smith said when asked whether lawmakers could sign off on a deal before July 1. “I don’t want to speak for the Senate. But I believe the House can mobilize and come together and pass a bill relatively quickly.

“The bottom line is we need to get it done before the end of this month,” Smith said, adding that he hoped Parson would call lawmakers back to the Capitol this month.

“I would call that a hope rather than an expectation,” Smith said.

He said the Legislature has restricted funds from abortion providers through the state budget; a judge blocked such a provision in 2019. On contraception restrictions, Smith said there are some questions as to whether the restrictions would jeopardize federal Medicaid dollars.

“One is clearly established policy and one is still developing,” Smith said. “I would anticipate moving forward with a plan that has some of these — that addresses some of these pro-life issues, but at the same time protects the integrity or the functionality of the Medicaid program.”

Sen. Paul Wieland, R-Imperial, who sponsored the contraception restrictions, said Tuesday he wasn’t going to predict whether his plan would be included in any package that negotiators finalize.

Opponents of the efforts by conservatives, including some Republicans, have blasted this year’s attempts to insert controversial proposals into the FRA.

Sen. Lincoln Hough, a Springfield Republican and vice chairman of the Senate Appropriations Committee, said the push to attach controversial riders to this year’s FRA bill may have been because of the legislation’s importance.

“They know that it has to get done,” said Hough, who opposed the efforts. “It gives people a little more of a stick, I guess, to say well if you want to get it done you’ve got to take — you’ve got to take what I want on here and I just don’t think it’s the right place to have that discussion.”

If the situation isn’t resolved, Hough said, “I think it will be catastrophic.”

Hough said the budget lawmakers approved this year includes billions of dollars “that the state is banking on having with this FRA.

“If I was in the governor’s shoes right now I would be talking about and having my team put in place budget restrictions, even though we’ve had incredible economic growth,” Hough said.

He said one of the targets could be health care provider reimbursement rates.

Wieland agreed it was prudent of the governor to consider contingency plans.

“I think it makes sense,” Wieland said. “The governor’s job is to control the budget and control the inflows and the outflows.”

House Minority Leader Crystal Quade, D-Springfield, said she wished Parson’s office had been more involved in talks during the legislative session in order to avoid the current situation.

“I wish he would’ve been a little bit more engaged in the legislative process and applied ... any type of pressure to the Republicans in the Senate to make sure that they got this done,” she said.

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