Mike Levitt’s nursing homes have experienced a difficult 14 months.
Still recovering after being ravaged by the coronavirus pandemic, Levitt’s Tutera Senior Living & Health Care, which operates five facilities in the Kansas City region, suddenly finds itself at the edge of financial oblivion.
Missouri lawmakers are at fault.
The General Assembly adjourned earlier this month without renewing a tax that funds vast swaths of Medicaid in Missouri. Nursing homes are heavily reliant on Medicaid patients, who have spent down their savings and now depend on the program to pay for their care.
Levitt, Tutera’s vice president, was so frustrated in an interview this week he was reluctant to even discuss what would happen to the homes if the tax is not renewed before it expires this September. Medicaid recipients make up 45% to 95% of residents at Tutera’s facilities.
“It’s unthinkable,” he said. “I hate to think if it doesn’t … We’ve never been here before.”
Missouri’s $12 billion Medicaid program is in the midst of twin crises driven by Republican lawmakers that will play out in the weeks and months ahead. Hundreds of nursing homes, hospitals and pharmacies — and their hundreds of thousands of residents, patients and customers — are caught in the middle.
For the first time in three decades, legislators failed to approve a Medicaid provider tax that generates about $1.6 billion every year. More importantly, the tax allows Missouri to receive an additional $3 billion in federal funds that are then returned to the providers to care for elderly, disabled and low-income residents. Failure to renew the tax would set the program on the course to financial apocalypse.
Hard-right Republicans, led by Sen. Paul Wieland of Imperial, are demanding anti-abortion provisions be included in any renewal.
Gov. Mike Parson is all but certain to call a special session this summer to renew the tax, called the Federal Reimbursement Allowance or FRA. But it remains unclear whether he can focus the session narrowly enough to foreclose an acrimonious birth control debate and how much power Republican leaders really have to end what has become a high-stakes game of chicken.
“It’s just shocking to me and so disheartening to me that we’re using this to leverage any other piece of legislation,” said Nikki Strong, director of the Missouri Health Care Association, which advocates for nursing homes.
The consequences of not renewing the tax are catastrophic, Strong warned. “Without the FRA, every nursing home in the state will be out of business,” she said.
At the same time, Medicaid expansion is in limbo after most Republican lawmakers balked at budgeting the roughly $130 million in state funds needed to expand eligibility for the program on July 1 under the terms voters approved last August. Without funding, Parson officially halted expansion earlier this month.
Advocates for expansion sued Parson’s administration this past week, triggering a legal fight that may lead to a judge ordering the program extended. Months of planning by the health care industry and coverage for an estimated 275,000 residents hinge on the lawsuit’s outcome.
The simultaneous fights over the provider tax and expansion have led to an unparalleled moment of uncertainty for Medicaid. Health care workers and patients are contemplating worst-case scenarios even as they tell themselves Missouri must, eventually, pull back from the edge.
“I think right now people are in shock and feel like we’ve got four months or so to get this thing sorted out,” said Ron Fitzwater, CEO of the Missouri Pharmacy Association.
Wieland, 58, a Catholic who has been in the General Assembly since 2011, is no stranger to showdowns over abortion and contraceptives.
He sued in 2013 to stop his state health insurance plan from covering contraception, saying it violated his religious beliefs. He eventually prevailed in court.
Term-limited and due to leave office in 2023, he is waging one more fight over contraception coverage.
In late March, he inserted provisions into a bill renewing the provider tax that would ban Medicaid coverage of “any drug approved by the federal Food and Drug Administration that may cause the destruction of, or prevent the implantation of, an unborn child.”
That means the abortion pill, RU-486, but it also encompasses common forms of birth control, including IUDs.
Under federal and state law, Medicaid already does not cover abortions, including RU-486, unless the mother’s life is at risk.
“For several years I’ve been figuring out a way to make it so that the state of Missouri taxpayers do not have to fund these drugs that destroy human life,” he said. “I need to do it while I’m still there.”
Wieland’s proposal caused the provider tax to stall and, despite weeks of negotiations, an apparent compromise collapsed in the final hours of session.
With 18 hours left, at the urging of Sen. Bob Onder, a Lake St. Louis Republican, the Senate voted to send the bill to a conference committee where it would be paired with Wieland’s birth control ban. Senate President Pro Tem Dave Schatz cast the deciding vote.
His vote marked an apparent backtracking on a deal with Democrats and some Republicans to pass the provider tax without abortion-related language.
The move effectively killed the bill. Senate Minority Leader John Rizzo, an Independence Democrat, was furious at what he described as a betrayal. He moved with no opposition on the last day of session to adjourn four hours early.
Wieland said this week he, too, was betrayed. The Republican caucus, he said, had agreed to pass yet another version of the tax renewal with his contraceptive ban included.
“It sounds to me like they ignored the will of the Republican caucus and went and tried to make a deal with the Democrats and that blew up in their face,” he said.
Schatz has said he thought the move to send the bill to conference would succeed regardless of his vote, and found it “difficult” to “be in a position of voting against pro-life measures.”
As the fight over contraception was developing, lawmakers were also taking steps to block Medicaid expansion.
Wieland’s first proposal came days before a House committee voted down funding to expand Medicaid, the first in a string of defeats for expansion in the General Assembly. Lawmakers ultimately passed a budget without it.
Unlike the dispute over the provider tax, efforts to block expansion garnered the support of a majority of Republican lawmakers. Some justified their votes against the voter-approved initiative by saying their districts oppose expansion or that constituents didn’t have all the necessary information.
The refusal forced Parson to decide whether to implement expansion without funding or call it off. He chose to call it off and a lawsuit quickly followed.
Parson’s office didn’t respond to questions for this story. Parson has said that without revenue “we are unable to proceed with the expansion at this time” to keep Medicaid financially afloat.
“I think that was the appropriate response on their part,” Rep. Cody Smith, a Carthage Republican who chairs the House Budget Committee, said of Parson’s decision.
As for litigation, Smith said lawmakers “will sit back and watch that process unfold.”
Parson expected to recall lawmakers
The twin developments — the failure to renew the provider tax and the blocking of expansion — have rocked the health profession in Missouri.
The provider tax had been renewed on time so often that its continued existence was almost assumed. And the health care industry had been preparing for expansion for months.
“We’ve been on this wild ride on Medicaid expansion for quite a while now and this latest turn is a bit of a surprise,” said Timothy McBride, a health economist at Washington University in St. Louis.
Health care industry representatives said the tax renewal is nearly always a bargaining chip for conservative Republicans. But Alina Salganicoff, director of Women’s Health Policy at the Kaiser Family Foundation, said she’s never heard of lawmakers trying to ban coverage of specific forms of birth control through the provider tax.
“The particular language that is being used in Missouri is not a language I have seen used in other states,” she said. “These are not medical terms. This is not how medical organizations define and classify drugs.”
Facing the prospect the provider tax will expire, health care advocates remain confident for now legislators will eventually act. They are unanimous in predicting Parson will call a special session.
At the same time, advocates are keeping up pressure. Missouri Foundation for Health President and CEO Dwayne Proctor said Friday that every day “this process is delayed is another day nearly 250,000 Missourians go without the access to health care they need.”
In theory, Parson could voluntarily reverse his stance and implement expansion. But even before advocates filed a lawsuit this week seeking to force him to open up eligibility, he had said he expected the issue to head to the court.
A Cole County Circuit Judge will almost certainly now decide at least the short-term future of expansion. The lawsuit seeks an order requiring Missouri to enroll newly-eligible individuals on July 1.
As for the provider tax, Wieland has vowed to bring up the birth control ban in any special session that allows it. Some political observers have suggested Parson could set strict limits on what lawmakers can consider in a special session.
“I don’t see how you can draft a call and say we’re not going to allow you to amend a bill, and I don’t think the governor will do it anyway,” Wieland said. “He’s not a dictator … I will fight on whatever I need to to get this done, yes.”
Running out of money?
The fights have left Sen. Bill White, a Joplin Republican, frustrated and concerned that Medicaid is likely to run out of money this year, sooner or later.
He voted against paying for the expansion, but acknowledged a court could force the state to enroll new recipients. That would leave the program underfunded regardless of whether the provider tax is renewed.
“It’s a have-to scenario,” White said. “Individual programs we’ve had little fights … they just don’t equal this dollar amount or this impact.”
Providers like Tutera, the Kansas City-area chain of nursing homes, will be watching.
For Levitt, Tutera’s vice president, imperiling the tax only adds “insult to injury,” as nursing homes across the state struggle to recover financially from revenue losses and high costs fighting the pandemic.
Without the funding, services for 23,000 elderly Missourians, covering everything from changing bedpans to monitoring medications, are on the line.
“We have all these other challenges we dealt with and fought through, and now we’re faced with a 40% cut in Medicaid, just because?” Levitt said. “It’s unconscionable.”