KS GOP wants to block Medicaid changes until 2026. Critics say they're risking $6 billion [The Kansas City Star]

Jan. 27—TOPEKA — Kansas Republicans, seeking to limit Democratic Gov. Laura Kelly's authority in an election year or beyond, want to bar the state from making any material changes to its Medicaid program until 2026 and block the administration from renegotiating key contracts that expire next year.

"Idea is to give the next administration a clean slate to put whomever's stamp on (the contracts)," Rep. Brenda Landwehr, a Wichita Republican said.

The "whomever" Republicans would like to see is Attorney General Derek Schmidt, the only GOP candidate currently running against Kelly. While the bill freezes Medicaid until 2026, an amendment contemplated by Landwehr would allow changes with legislative permission.

The bill requires the state extend its existing contracts with three insurance companies that currently manage the system rather than take bids for new providers.

But the state's Medicaid director, joined by advocates for providers and patients, warned in a hearing Wednesday that the measure could lead to numerous unintended consequences. These include, they said, new medical innovations not covered, provider rates — already viewed by many as too low — frozen, foreclosure on any eligibility expansions and loss of up to $6 billion in federal funding.

A block on renegotiation of contracts with the insurance companies, known as managed care organizers (MCO's), is one thing, said Kansas Medicaid director Sarah Fertig. But the wording of the bill is so broad she worried the state would be blocked from performing the myriad of routine tasks needed to keep a major social services functional.

"It's not really clear to us what we would be barred from doing. Our concern is that it would block us from doing anything to the Medicaid program," Fertig said. "It could put us in an awkward position where we could neither comply with state law nor federal law."

In written testimony, Kansas Department of Aging and Disability secretary Laura Howard said the bill would block the implementation of new programs, prevent the agency from adjusting to workforce shortages and need for telehealth and block the regular renewal of federal waivers.

"Ultimately, this may lead to delays in implementing life-saving programs and programs that protect rights of persons with disabilities," Howard wrote.

Anne Dwyer, associate professor at the Georgetown University Center for Children and Families, said that at the pace medicine moves, Kansas would certainly fall years behind other states to the detriment of healthcare providers and Medicaid recipients. The bill could potentially lead to the collapse of its program.

"There is a bigger question if it's hard to see how a program could function for that many years without being able to make any necessary changes," Dwyer said.

Kyle Kessler, executive director of the Association of Community Mental Health Centers of Kansas, said he's particularly interested in what this could mean for rates as mental health professions face workforce shortages seen across the healthcare sector. In hearings on KanCare over the summer, providers and patients alike told lawmakers that the state simply didn't pay enough to sustain a workforce.

"Healthcare providers, whether it's mental health centers ... or providers of services for people with intellectual disabilities. There's an incredible amount of competition for a finite workforce," Kessler said. "The inability to provide wage increases and stay competitive with other areas of the workforce is absolutely a real challenge."

The move could also tie the agency's hands if the Legislature moves forward on expansion of post-partum coverage for new mothers — an issue that's earned bipartisan support this year — or full Medicaid expansion, which is highly unlikely given the opposition of GOP leaders in the Legislature.

Landwehr said she believes an amendment to the bill, allowing the agency to make changes if directed to by the Legislature or federal authority, may solve many of those issues. If rate changes are needed, Landwehr said, they can simply get Legislative permission.

"I'm gonna go back and I'm going to talk with the experts," Landwehr said. "I want to address those concerns."

But Fertig said the agency's hands would likely remain tied on many regular maintenance items. Furthermore, she warned that the state would place itself in a poor bargaining position if current contractors know they are guaranteed a contract through 2026.

"No matter what happens we would not be able to threaten termination of the contract,"Fertig said.

But House Speaker Ron Ryckman said the move was necessary to ensure the Legislature had more control over the process, citing concern over how unemployment modernization has been handled.

"We look at the way the RFP process was used for the Commerce Committee we want to make sure that those decisions are left with the folks that include some industry experts," Ryckman said. "We want to make sure that the system is intact and there's not preferential treatment being used."

But advocates for providers and beneficiaries said Kansas will lose opportunities the longer it waits to put out bids for managed care organizations and update the contracts that started in 2019.

"You don't know what the new MCOs may bid on the project so what potential changes," Sean Gatewood, a lobbyist for KanCare Advocates said. "I would think that it would be more fitting in today's health care climate that whatever those value addeds and however they're planning on providing the service would be more tailored to where we are now."

This story was originally published January 27, 2022 3:22 PM.

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