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Governor calls special session to extend Medicaid funding tax

by Ryan Pivoney | June 22, 2021 at 5:30 p.m. | Updated June 23, 2021 at 10:54 a.m.
Missouri Gov. Mike Parson delivers his 2021 State of the State address Wednesday, Jan. 27, 2021, at the Missouri State Capitol.

Missouri Gov. Mike Parson issued a call for a special session Tuesday, signaling Republican lawmakers have created a plan for extending Medicaid funding for the state.

Missouri lawmakers are heading back to Jefferson City to pass a renewal of the Federal Reimbursement Allowance, a tax on health care providers that largely funds the state's Medicaid budget. The special session begins at noon Wednesday.

"After laying out the grim reality of our state's financial future if FRA is not extended, I believe legislators have now agreed to a compromise that will end this stalemate, so today I am announcing a special session to begin tomorrow at noon," Parson said in a news release. "We appreciate the continued efforts of House and Senate leadership to work with us towards a solution, and we are thankful that we are now in a position that warrants a call to special session."

Parson on Monday announced a deadline at noon Tuesday for lawmakers to break the stalemate on the issue. They have just five days for the legislation to pass both the House and Senate, as the deadline for a balanced state budget is set for July 1.

Roughly one hour before the noon deadline, Senate Republicans sent a letter to Parson asking him to call an extraordinary session to pass the FRA extension and legislation to prevent public funds from going to abortion services. The letter was signed by seven senators: Rick Brattin, Eric Burlison, William Eigel, Denny Hoskins, Andrew Koenig, Mike Moon and Bob Onder

"Once you call us into Extraordinary Session, the General Assembly can legislate and pass legislation to ensure taxpayer dollars are not used to pay for abortion services," the letter states. "We will also be able to pass legislation to extend the FRA to prevent budget shortfalls like we have also done in sessions past."

The Senate neglected to pass a renewal of the FRA during the regular session after two amendments were added. The first amendment, proposed by state Sen. Paul Wieland, R-Jefferson County, restricted the use of Medicaid dollars for contraceptive medicine or devices. The second amendment, proposed by Onder, R-Lake St. Louis, would remove Planned Parenthood from the list of Medicaid providers.

Parson was in discussion with Republican leadership last week to discuss plans for a regular session. He told reporters a special session would not be called unless there was a solid plan for renewing FRA in place beforehand. The plan they created adopted the restriction on contraceptives and extended the FRA by five years. It did not include the removal of Planned Parenthood as a Medicaid provider, which derailed original plans for a special session.

Parson said the FRA reduces expenses on the state budget while maximizing the federal funding for the state. Without the FRA extension, the state will be required to close a $1.4 billion funding gap over the next two years. Additionally, payments from the MO HealthNet program would also drop by $1.52 billion in fiscal year 2022 and $2 billion in fiscal year 2023 if the FRA isn't extended.

The Legislature already passed a $35.1 billion budget for the upcoming fiscal year, part of which relies on the funding provided by the FRA.

"Let me be clear, now is a time that demands leadership among legislators and not an opportunity to play games with billions of dollars and millions of livelihoods in pursuit of narrow political interests," Parson said.

If lawmakers decide not to extend the FRA during the special session, Parson said he is prepared to withhold funding from education, social services and healthcare.

Education would lose funding for community colleges and four-year universities, capital improvement projects, K-12, school safety planning, the A+ and dual-credit programs, career center improvements and school transportation.

Social services withholdings would come out of funding for foster care and adoption services.

Health care would lose funding for nursing homes, independent living centers, emergency management service providers, and health care providers serving those with developmental disabilities and transportation for those individuals.

The call specifically charges the General Assembly with extending the expiration of: the FRA program, the ground ambulance service reimbursement allowance, the nursing facility reimbursement allowance, the Medicaid managed care organization reimbursement allowance, the pharmacy tax and the intermediate care facility for the intellectually disabled assessment. The session will also address prohibiting abortifacient drugs and devices, prohibiting funding for abortion facilities under the Uninsured Women's Health Program, and allowing the Senate to consider appointments that require the advice and consent of the Senate.

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