Criticizing Kansas, feds deny extension of KanCare privatized Medicaid program

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' authorization for its privatized system ends at the end of this year. The state must take corrective action to ensure the continued existence of KanCare and submit a plan to address federal officials' 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."

"We think it's politically motivated, the last blow from the Obama administration as they go out the door," she added.

Brownback had touted KanCare during his Jan. 10 State of the State address, saying that Kansas continues "to be at the vanguard in reform and improvement of our social services delivery."

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.

Aldona Carney, a retired teacher from Wichita, said her 22-year-old son Neil has severe autism and relies on the KanCare program for medical services and daily needs.

When the program first started, she said, people were promised better outcomes. But Carney said her family hasn't seen what was promised.

"I think the federal government is right," Carney said. "This is the most vulnerable population in Kansas. A lot of them can't speak and can't stand up for themselves. I really believe they do need to fix it. They need to make it better. If we're going to keep it then we need to fix it and make it better because there's a lot of people suffering."

The letter was first reported by the Topeka Capital-Journal late Wednesday evening.

Rep. Dan Hawkins, a Wichita Republican who chairs the Legislature's KanCare Oversight Committee, called the news devastating and criticized the Brownback administration for not informing lawmakers immediately upon receiving the letters from federal officials.

"Everybody was blindsided in the Legislature," Hawkins said.

"Why do I got to find out by reading the newspaper?" he said. "Why didn't I get a call yesterday or Tuesday? How come nobody has said anything to us about that? That's ridiculous...I've got members coming to me, saying, what are we going to do? I don't have any information yet."

Hawkins said he immediately tried to contact Lt. Gov. Jeff Colyer, KanCare's primary architect, but was informed that Colyer was in Washington, D.C. Colyer is scheduled to testify before the U.S. Senate Finance Committee on the future of Medicaid.

Sean Gatewood, the co-administrator of the KanCare Advocates Network, a group that represents KanCare beneficiaries and service providers, also blasted the Brownback administration's lack of transparency on the issue.

"Notice the date," Gatewood said. "That administration has had that for this whole week and has been marching around the state telling the Legislature, the people of Kansas, that KanCare is in great shape and they've had that letter that talks about how this is putting lives in danger."

Gatewood said that it's unknown how the incoming Trump administration will proceed. There's a possibility that the new administration could be more lenient on Kansas, but Gatewood said this puts pressure on state policymakers to respond regardless.

"The one thing that we know for sure is that this puts the Legislature on notice that the system is fundamentally flawed and they need to take some pretty serious corrective actions," Gatewood said.

Hawkins said the federal report highlighted the need for an inspector general of the KanCare program.

The state has been without an inspector general for the program since 2014 and the Kansas Department of Health and Environment has made no progress in filling the position. Hawkins has a bill that would shift the inspector general position to the attorney general's office, which he said would give the program more oversight than the part-time Legislature can provide.

The federal government spends $1.28 for every dollar the state spends on Medicaid. If Kansas fails to meet federal standards, it will put that money at risk.

"Obviously, we've got to find a way to resolve that because the federal dollars involved are substantial," said House Majority Leader Don Hineman, a Dighton Republican.

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."

While lawmakers help oversee KanCare, Ward said the governor is responsible for what's happened to the privatized Medicaid program.

"If Sam Brownback was the manager of a McDonald's, and ran it like he runs this state, you would have fired him two years ago," Ward said.

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."

Susan Jarsulic, who helps care for her 38-year-old daughter Jayne at the Shawnee home the family shares, welcomed the federal government's action.

"They are finally holding Kansas's feet to the fire," she said. "..I'm just glad that CMS is saying 'No, we're not going to extend KanCare right now unless you make some improvements.' "

Bryan Lowry: 785-296-3006, @BryanLowry3

Hunter Woodall: 785-354-1388, @HunterMw

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