Staff Contact: Daniel Landon, Rob Monsees or Brian Kinkade
The Missouri General Assembly gave its final approval to the state budget for fiscal year 2022 today, which is the constitutional deadline for completing the work. The following elements of the budget are of particular interest to hospitals.
- $3.2 billion for hospital care through the Medicaid fee-for-service, Federal Reimbursement Allowance and managed care programs. The budget authorizes funding for the projected Medicaid spending for hospital services for the upcoming fiscal year.
- The budget does not include direct funding of Medicaid expansion, but sets aside $500 million in a newly created “Medicaid Stabilization Fund” presumably to fund future program growth. Language from previous years’ budgets prohibiting expenditures for Medicaid expansion was omitted.
- The budget assumes savings of $60 million from conversion of outpatient payments to a Medicare-based fee schedule but provides $50 million for distribution to hospitals incurring losses as a result of the conversion. Implementation of the fee schedule is expected to be delayed with the Secretary of State’s recent denial of an “emergency rule” to bypass the regular regulatory review process.
- The budget preserves Medicaid hospital “out of state payments” but caps them at the current year’s level of $215 million, which was part of a longer-term payment reform proposal developed by MHA members.
- The budget assumes savings of $40 million from basing 340B pharmacy reimbursement on actual acquisition cost. Some of the savings are federally mandated. Applying the change to physician-administered drugs is not federally required but favored by CMS.
- Funding was approved for the Missouri Department of Mental Health to make as much as $2 million in payments to hospitals for clients of the Division of Developmental Disabilities who remain in inpatient hospital care because no appropriate community placement is available for them.
The budget bills will be delivered to the governor for final approval. The state fiscal year begins Thursday, July 1.
