Feds Quash Privatized Medicaid in Kansas

By Bryan Lowry

Jan. 19--Federal officials have rejected Kansas' request to extend the state's privatized Medicaid program for another year after raising concerns about the program's transparency and effectiveness.

Kansas is "substantively out of compliance with Federal statutes and regulations, as well as its Medicaid State Plan," concluded investigators from the Centers for Medicare and Medicaid Services after a review in October, according to a letter sent to state officials on Jan. 13. That federal agency oversees the program.

Four days later, CMS rejected the state's request to extend the program through December of 2018. Kansas must take corrective action to ensure continued existence of the program past 2017. The state is required to submit a plan to address the concerns by Feb. 17.

Kansas privatized its $3 billion Medicaid program in 2012 under the KanCare umbrella at Gov. Sam Brownback's urging, shifting the bulk of responsibilities for providing services to three private managed care organizations. The program relies on a combination of state and federal funding.

Federal investigators identified a series of shortcomings with the program's administration, including diminished oversight by the state and a failure to provide beneficiaries with clear and consistent information.

"Public feedback consistently describes a lack of engagement and adversarial communication from the State. Comments from KanCare stakeholders at multiple stakeholder sessions overwhelmingly reflect an inability to obtain clear and consistent information from the State and MCOs (managed care organizations), making it difficult for KanCare enrollees to navigate their benefits," the letter stated.

The letter states that CMS received complaints from beneficiaries, healthcare providers and advocates throughout 2016 and conducted a series of interviews with state officials and the three companies providing coverage.

Angela de Rocha, a spokeswoman for the Kansas Department for Aging and Disability Services, said the state "is going to do what CMS asks us to do although we do not necessarily agree with all of their conclusions. We're working on a plan of corrections."

Among other problems identified by CMS investigators: The state lacks a comprehensive system for reporting and tracking critical incidents for beneficiaries on the disability waiver, and no data exists to show unexpected deaths were investigated within required timeframes.

"The lack of oversight of critical incidents increases the risk that waiver recipients' rights, health, and safety could be in jeopardy," the letter stated.

The letter also faults the state for allowing the managed care organizations to develop their own appeals processes. Under federal rules, the state should have either developed or approved that process.

CMS "uncovered significant compliance deficiencies" in crafting plans for beneficiaries. The letter states that managed care organizations asked beneficiaries to sign incomplete forms without the number of hours or types of services they would receive when agreeing to a service plan and that the managed care organizations revised plans without the beneficiaries' input.

House Minority Leader Jim Ward, a Wichita Democrat who has served on the KanCare Oversight Committee, said serious questions need to be asked by lawmakers about the privatized program.

He said the findings make him angry. "These are disabled people, old people and kids."

The oversight committee meets infrequently between sessions, and Ward said in light of this week's news that the committee needs to meet more often.

"There needs to be real oversight," Ward said. "So yeah, there's been virtually no oversight."

Senate Majority Leader Jim Denning, an Overland Park Republican, said he was caught off guard by the findings.

He said the KanCare oversight committee had become more aggressive and wanted changes within the program.

"I'm disappointed," Denning said. "That program is so complex, so expensive, so huge and to have it out of compliance, that's really very concerning to me."

(c)2017 The Kansas City Star (Kansas City, Mo.)