Kansas took millions it shouldn’t have, federal probe says. But will it give it back?

Nov. 17--Kansas took nearly $18 million in federal funds that it shouldn't have, a federal government watchdog says. It wants the state to give the money back.

Kansas rejects the findings.

"We don't believe we did anything wrong," said Angela de Rocha, a spokeswoman for KanCare, the state's Medicaid program.

The U.S. Department of Health and Human Services Office of Inspector General alleges Kansas incorrectly counted some children in seeking bonus payments to offset the cost of children enrolled in Medicaid, a federal program run by states that provides health care to the uninsured. That led to more bonus payments than Kansas should have received.

A November report by the Office of Inspector General recommends Kansas refund $17,796,598.

The Office of Inspector General audited bonus payments from 2009 through 2013. The nearly $18 million represents almost half of the bonus payments Kansas received during that time, which totaled $36.6 million.

The dispute between Kansas and the Office of Inspector General centers on the way the state calculated the number of children enrolled in Medicaid -- specifically the Children's Health Insurance Program -- for the purposes of the bonus payments. The report says Kansas overstated its enrollment.

Kansas maintains it followed guidance given by the Centers for Medicare and Medicaid Services on how to make the calculations. But the OIG says CMS correctly explained how the calculations should be made.

"Kansas understands the importance of utilizing Federal Medicaid funds appropriately. This was no exception," Christine Swartz, the state's deputy Medicaid director, wrote in a July letter to the Office of Inspector General.

The federal report says that after considering Kansas's comments, the OIG stood by its findings and recommendation.

The OIG's recommendation that Kansas give the money back remains just that -- a recommendation -- de Rocha emphasized. She said CMS has not sought the funds' return.

The report comes as Kansas seeks reauthorization of its privatized Medicaid program, known as KanCare. The state must obtain permission from CMS to continue the program.

Audits of other states have also found bonus payments that should not have been allowed. Another report released this month found that Ohio had been overpaid by $29.5 million.

"In previous audits...we found millions of dollars in unallowable bonus payments," the Kansas report said, "therefore, we identified (Children's Health Insurance Program) bonus payments as a high-risk area."

Jonathan Shorman: 785-296-3006, @jonshorman

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