This attorney would audit KanCare, but isn’t allowed to start yet

Aug. 24--TOPEKA -- More than 400,000 Kansas residents are on Medicaid, but a key oversight job designed to root out waste, abuse and hold the program accountable remains empty more than half a year after a nomination was sent to lawmakers.

That's despite the fact that the Kansas Medicaid program, a privatized system called KanCare that provides health insurance for low-income and disabled residents, is moving forward with new contracts for insurance companies worth billions of dollars and will extend a contract with a company whose poor performance caused bureaucratic headaches for enrollees.

Kansas hasn't had a KanCare inspector general for years. The last inspector general resigned in 2014 amid questions about his qualifications.

But the inspector general position continues to sit vacant a full legislative session after Sarah Fertig's name was sent to the Kansas Senate for consideration.

A top Senate Republican said the timing wasn't good for a confirmation vote during the legislative session this spring, but he said he planned to hold a hearing on the nomination this fall.

In 2017, the Legislature passed a law creating a Medicaid inspector general position within the attorney general's office. The position had previously been located within the Kansas Department of Health and Environment, the agency that oversees KanCare.

On January 11, Attorney General Derek Schmidt nominated Fertig, an assistant attorney general, for the position.

The Senate never voted.

"There's nothing (that has been) spent, no office set up, no staff hired -- we don't have anything done yet," said Rep. Dan Hawkins, a Wichita Republican who chairs the Legislature's KanCare Oversight Committee.

Fertig needs to be confirmed by the Senate before she can begin the job. In some Senate-confirmable positions, appointees can serve in an interim or acting capacity before they're confirmed; that isn't the case here.

Senate Majority Leader Jim Denning, an Overland Park Republican, said the vetting process for Fertig concluded right before the Legislature began its veto session, which lasted a little more than a week. The veto session was kept unusually short after legislative wrangling over its length, with Senate Republican leaders backing a short session.

"I believe that file had been completed right before veto session when everything got back and clear," Denning said.

Denning indicated a vote wasn't held on Fertig during session because of the timing of the completion of the vetting process.

"Just the timing wasn't conducive for us," he said.

But Sen. Barbara Bollier, a Mission Hills Republican who often focuses on health issues, said the vote could have been held.

"The business of the state should be done," Bollier said.

The Senate Confirmation Oversight Committee will take up Fertig's nomination when it meets this fall, Denning said. Approval by the committee will allow Fertig to begin working, he said. That would then be followed by approval from the full Senate early in the 2019 session.

"We're hopeful the Committee will take it up at its next meeting," Jennifer Montgomery, a spokeswoman for the attorney general's office, said in an email.

When Schmidt announced Fertig's nomination, he said the inspector's general's purpose is to "establish a full-time program of audit, investigation and performance review to provide increased accountability, integrity and oversight of the state Medicaid program" and to improve program operations. He named "deterring and identifying fraud, waste, abuse and illegal acts" as part of the inspector general's mission.

The law also requires the inspector general to be independent and free from political influence.

"Having legitimate third-party oversight of a program like that is important. So I hope they get it going," Sean Gatewood, co-administrator of the KanCare Advocates Network, said.

The next few months mark a critical time for KanCare. In January, the state will begin new managed care contracts with three insurance companies. Each contract is worth about $1 billion annually. One of the companies will be new as well.

The state also plans to extend a contract with Maximus to operate the KanCare Clearinghouse, a facility in Topeka where workers process Medicaid applications. Maximus has been under fire for months over poor performance, however.

While the Kansas Department of Health and Environment plans to extend the contract, the state will begin directly processing the most difficult applications itself. Still, Maximus stands to earn more from the new contract.

"This whole fiasco with Maximus? They should be overseeing that," Bollier said of the inspector general.

The inspector general position has its own checkered past in Kansas.

Phil Hermanson, a former lawmaker, took over the post in 2014. But Hermanson resigned after his qualifications and background was questioned.

The position has remained vacant since, though KDHE periodically said it was attempting to fill it. In 2017, lawmakers voted to transfer the position to the attorney general's office.

"It's a very important function of the Medicaid system that we haven't used for years and we're trying to get up and running," Hawkins said.

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