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Missouri House passes bill to extend key Medicaid funding source for 3 years

Parson warned of budget cuts without it
Posted at 1:50 PM, Jun 30, 2021
and last updated 2021-06-30 19:12:25-04

KANSAS CITY, Mo. — Ahead of a July 1 deadline imposed by Missouri Gov. Mike Parson, the Missouri House of Representatives passed a three-year extension of the federal reimbursement allowance by a wide majority.

The House also passed a separate bill that could threaten federal funding if enacted.

The federal reimbursement allowance, commonly referred to as the FRA, is one of Missouri’s largest revenue streams and provides the bulk of the funding for MO HealthNet, which is the state’s Medicaid program.

Parson said in a tweet that legislators "put narrow political interests aside" to approve the FRA extension.

"Without their efforts, we would be announcing unprecedented budget restrictions rather than these historic investments," Parson said. "To those who helped get FRA across the finish line: we appreciate your work."

Conservative members of the Republican caucus had sought to deny payment for contraceptive services as part of the renewal fight, which threatened to put Missouri outside federal regulations and could have cost the state billions in health care funding.

RELATED | Explaining fight in Missouri over FRA renewal

Some state legislators sought to have Planned Parenthood barred from receiving funds as a Medicaid provider, which also would run afoul of federal regulations.

That's where House Bill 2 comes into play, which seeks to prevent the federal government from dictating how Missouri spends it Medicaid funds and would strip Planned Parenthood — which operates a clinic in St. Louis that is the only active abortion provider in the state as it stands — from receiving any money from the FRA.

The Senate passed its version of the bill late Friday on a 28-5 vote.

The Missouri legislature is expected to swiftly reconcile the FRA renewal bill and forward it to the governor's office for his signature, but the Senate would have to act on a similar measure to House Bill 2 before it could proceed.

That isn't likely to happen since the Senate already adjourned and returned home.

Parson announced June 21 that the state would face massive cuts to education, infrastructure and workforce development, among other state programs, if the FRA wasn’t renewed by July 1.

The Missouri legislature was called back to Jefferson City on June 23 for a special session to renew the FRA, a tax paid by Medicaid providers in Missouri that the federal government more than matches and returns to the state.

Missouri law already prevented that money to be used for abortion services, but some conservative state lawmakers sought even more restrictions.

Parson warned that failure to renew the FRA or passing a renewal that wasn't in line with federal requirements could cost Missouri nearly $600 million in fiscal year 2022 and nearly $800 million in fiscal year 2023.

The FRA was established in 1991 under former Gov. John Ashcroft and serves as a funding mechanism for Medicaid in Missouri.