Kansas Medicaid full of problems, but contractor says it shouldn’t take all the blame

Feb. 18--Herbert Shaffer worked for decades doing carpentry, building metal outbuildings and stripping out old railroad boxcars, all the while paying taxes in Kansas and pinching what pennies were left for later in life.

Like many Americans, he outlived those savings after he moved into a nursing home. So last March, his daughter, Nyoka Isabell, helped him apply for Medicaid to pay for his bed at Lakeview Village in Lenexa. Then they waited. And waited.

Nearly a year later, they were still waiting -- two of the thousands of Kansans frustrated by an application process that has been bogged down for the better part of three years.

"He worked his tail off and had to spend his money to pay for his care and now we're at where we're at," Isabell said. "He still needs care, but I can't afford it and he definitely can't afford it."

For the past year Isabell has been making regular calls to the KanCare Clearinghouse, a facility in Topeka where Medicaid applications are processed. It is staffed by a mix of state workers and employees of a contractor called Maximus.

After three years of Kansans and nursing home representatives complaining about long delays in getting Medicaid approved, big changes appear to be in store for the Clearinghouse, as Gov. Laura Kelly has proposed minimizing Maximus' role.

But in an interview in Topeka Feb. 12, Maximus officials said they have taken an unfair share of heat for the problems at the Clearinghouse.

They said they've improved their performance, but they're just one part of the broken system, and it will do no good to cut them out of the process.

"Whether Maximus is doing it or not doing it, it's still broken," said Christine Osterlund, the KanCare Clearinghouse project director for Maximus. "And so our goal is to identify where all those breaks are and it's going to take all the partners together. It's not something that Maximus can solve, it isn't something that KDHE (Kansas Department of Health and Environment) can solve on its own, it's not something the nursing facilities (can solve). We all need to come together and work through these issues. That's what's going to make the system work."

Maximus' Clearinghouse contract has been worth, at minimum, about $17 million a year.

In her first budget, Kelly, a Democrat, proposed hiring 300 state workers to take some of the most complex applications away from Maximus. Her administration also wants to eventually re-open bidding for the rest.

It appears Republicans are unlikely to fight her on it. Officials who led KDHE under her Republican predecessor, Jeff Colyer, recommended the same thing, said House Majority Leader Dan Hawkins, a Republican from Wichita who has clashed with Kelly over other issues.

"They were emphatic it was time to make a change," Hawkins said. "It's truly one of our biggest headaches."

The history

To understand how applying for Medicaid became so frustrating for so many Kansans, you have to understand the program's recent history.

Maximus has been helping the state process some applications for about 20 years, but for most of that time the contractor handled only a certain type: family medical applications that are mostly for children and pregnant women. The company evaluated those applications and then made recommendations to state health officials, who had the final say on whether to approve or deny.

Applications for people who are elderly and disabled and need care at home or in a nursing home were processed by state workers from another agency in offices across the state, where people could walk in and get face-to-face help. Those applications are much more complex than the family medical applications and often require reams of financial data.

At the beginning of 2016, then-Gov. Sam Brownback used an executive order to funnel all of the applications together in a single entity: the KanCare Clearinghouse.

The goal was to make things more efficient. But that wasn't the result.

On the date of the changeover, Maximus received about 3,800 partially completed applications. Getting up to speed on those, with a workforce still new to the more complex applications, was hard enough, Maximus officials said.

But they were also using a new computer system beset with problems that required time-sucking workarounds.

That technology -- the Kansas Eligibility Enforcement System, or KEES -- was developed by another big-name government contractor, Accenture. The initial contract called for the state to pay Accenture $135 million, but the Legislature's auditors determined that the project went over budget by about $46 million as its initial rollout was delayed by years while developers tried to work out the bugs.

There were still plenty of bugs once it rolled out, though, Maximus officials said.

Members of the Colyer administration said Maximus intentionally low-balled its bid on the Clearinghouse project to get the contract. But while Maximus officials acknowledged they were initially understaffed, they said it was because they based their bid on the computer system Accenture promised, not the one it delivered.

Ilene Baylinson, the manager of Maximus' U.S. health division, said the company knew it would probably take a little longer with a system that was processing all types of Medicaid applications. But they had no idea just how much longer it would take with KEES.

"The actual time it took to process an application for just family Medicaid from how we did it in our system to how long it took in the new system was more than double," Baylinson said. "And we never could have anticipated that."

Under federal law, most Medicaid applications are supposed to take no more than 45 days to process. But thousands of Kansans had to wait longer than that, forming such a backlog that KDHE had to submit to federal monitoring.

The delays hit nursing homes particularly hard financially because they rely heavily on Medicaid reimbursements.

Baylinson said Maximus did its part to address the backlog, hiring dozens of people "on our nickel" and forming specialized teams to work directly with nursing homes that had a lot of residents with pending applications.

The backlog is now way down -- below 1,000 -- and the nursing homes say things have improved. But there are still cases like Isabell's 88-year-old father, which Maximus officials said means the initial backlog itself couldn't have been responsible for all the delays.

KEES still has two glaring shortcomings, they said. For one thing, it has no workflow management function that would provide daily reports on applications processed and received and alerts when applications are approaching 45 days. Maximus had to make its own system for that.

KEES also has no way for applicants to upload financial documents digitally. KDHE is working on a secure upload portal, but for now, supporting documents often have to faxed or sent by traditional mail to a mailroom run by yet another state contractor.

All of which provides extra opportunities for documents to be misfiled, not received or otherwise not attached to their underlying application. Kansans' complaints about being asked to submit the same forms over and over again are well taken, Baylinson said, but not something Maximus has full control over.

"In most states that we work with, they've basically eliminated paper," Baylinson said.

Accenture spokesman Joe Dickie said via email that, "We remain focused on continuing to meet our responsibilities on KEES" and referred other questions to KDHE.

KDHE secretary Lee Norman said the agency's new leadership is "committed to holding contractors accountable, addressing the application backlog and improving services to Kansans."

"That means addressing any challenges with the state's computer programs and technology as well," Norman said.

Concerns remain

Hawkins said that if Maximus officials were concerned about KEES or other aspects of the Medicaid system, the company should have raised those issues years ago, rather than waiting until its contract was in jeopardy.

Maximus officials said they have raised issues privately with KDHE, and the current administration seems more receptive to fixing the problems. But until recently they thought it was better to stay behind the scenes.

"We tend to be a silent partner and operate our programs on behalf of our clients and focus on what we're paid to do," said Lisa Miles, the company's vice president of investor relations and corporate communications.

She, Osterlund and Baylinson said they're going public now to "correct misinformation" about the company's performance on the Medicaid contract.

But there have also been complaints about aspects Maximus directly controls, including the Clearinghouse's customer service call center. While complaints of hours-long hold times have lessened, Isabell said she's been calling regularly for months, and it wasn't until recently that she reached an employee who seemed to take a genuine interest in making sure her dad's case was completed.

"It's been like pulling teeth, seriously," Isabell said. "In general, the call center reps, as polite as they may be, they haven't been very helpful to me."

Nursing home officials have run out of patience, too, after years of unpaid bills. Many have stopped taking in new people if their Medicaid application is still pending.

Rodney Whittington, the administrator of Villa St. Francis in Olathe, which serves more Medicaid residents than any other nursing home in the state, said that at one point, about one-fourth of his 170 residents had applications pending, and the facility was carrying $2.5 million in unpaid accounts receivable.

Whittington and other nursing home administrators testified last week for a bill that would force Maximus or any other contractor the state might hire to pay nursing homes a penalty fee for every day past the federal standard that applications are pending.

Maximus opposed the bill, saying that sometimes applications must go beyond 45 days, like when Adult Protective Services is investigating suspected financial abuse of an elder.

Nursing homes generally get back pay once applications are approved, but that often doesn't happen if residents die while awaiting approval, because it gets harder for families to complete the process and nursing homes are reluctant to ask them to at that point.

And back pay doesn't always make up for the cash flow problems. Villa St. Francis is affiliated with the Catholic Church and could lean on the Archdiocese for financial support, but other facilities had to take out bank loans (and pay interest) to get them through. Some reported losing longtime vendors for things like food service because they weren't able to pay on time.

Whittington said Maximus' specialized nursing home teams are an improvement, but the company's workers still seem under-trained and less knowledgeable about the more complex Medicaid applications than the state workers who used to handle them.

Re-hiring and training a new state workforce to take over takes time, though. Kelly's initial budget proposal called for it to happen in July, but KDHE officials said recently they're now looking at the end of the year.

Several nursing home administrators said what would really help is if the state not only took back control of application processing, but also restored the regional offices where people could walk in for face-to-face help.

Isabell said she's also all in favor of that.

"So you could hold somebody accountable, yes," Isabell said.

The Kelly administration wouldn't say whether that's in the cards but suggested they're considering it.

"The governor is also interested in looking at different ways to make the application process more streamlined, and possibly provide more hands-on assistance to applicants," said Norman, the state health secretary. "We will be looking at ways to accomplish this in the coming months."

Meanwhile, a KDHE spokesman said Isabell's father was approved for Medicaid Feb. 13 -- the day after The Star asked Maximus officials about his case -- and a notice of approval was in the mail. He said Lakeview Village would be eligible for Medicaid payments back to March 2018, and the agency would try to determine what happened to the application during the year it was pending.

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