State to withhold $750k from contractor over faulty Medicaid backlog reports

Lawmaker on backlog: 'We've got to figure this out'

By Jonathan Shorman, June 20, 2016

On June 8, Gov. Sam Brownback delivered an upbeat assessment of the state’s Medicaid program.

KanCare had faced difficulties as administration shifted from the Kansas Department of Children and Families to the Kansas Department of Health and Environment, he acknowledged. The Medicaid program still had a backlog of unprocessed applications, but the figure had been shrinking in recent weeks.

“Overall, KanCare has been a very successful program. Not that there haven’t been disputes and different things along the way, and we’ve had some sign-up difficulties as we’ve shifted it from KDADS to Department of Health and Environment,” Brownback said. “But we’re getting on top of those, and that’s starting to work.”

Two days later, the state sent a letter to the federal government. The backlog, it turned out, was four times as large as previously thought.

The state knew about a week before the June 10 letter, which leaked to media, that the backlog had been under-counted, but it re-ran the figures for verification.

The disclosure late last week that Kansas had under-counted the number of unprocessed applications by 12,000 is drawing fresh attention to the state’s electronic eligibility system nearly a year into its troubled rollout. The apparent progress the state had been making toward whittling down the backlog has been thrown into doubt.

Data from the state show the backlog grew the most among those waiting 45 days or more with unprocessed applications. The error leading to the low-ball figures — made by the contractor Accenture, the state said — excluded those reapplying for KanCare.

Accenture, a global consulting, technology services and outsourcing company, holds numerous government contracts and has faced trouble in some states. Kansas says a reporting problem from the company, which is tasked with implementing the eligibility system, produced the under-counting, not the eligibility system itself.

Kansas said Monday it will withhold a $750,000 payment from Accenture in response. Accenture said it didn’t provide inaccurate information to KDHE, but gave the state information as requested.

Lawmakers are once again seeking answers and expressing frustration with KanCare, bedeviled by a backlog and complaints of problems accessing the program. Official legislative inquiry will likely have to wait until August, however — House and Senate leadership have ruled out hearings during the upcoming special session.

“We’ve got to figure this out. This is getting pretty bad,” said Rep. Dan Hawkins, a Wichita Republican who chairs the KanCare Oversight Committee.

Backlog undercounted

Kansas has experienced problems with Medicaid since bringing its electronic eligibility system, known as KEES, online last year. The issues helped create a backlog of unprocessed applications.

The backlog has been well-publicized in recent months as patients and advocates for the elderly and disabled report problems accessing the program. In response, the state brought on temporary staff.

Figures showed the backlog declining. From 18,216 at the start of February, the number of unprocessed applications fell steadily through the beginning of May. At that point, the state reported 3,480 applications awaiting action.

Then came the letter.

KDHE secretary Susan Mosier wrote to the federal Centers for Medicare and Medicaid Services on June 10. In her letter, she disclosed the state had previously underreported the backlog.

The letter was one in a series of bi-weekly reports from the agency to the federal government, which asked Kansas for regular reports on the backlog beginning in February. Mosier wrote the change in the backlog number stemmed from an error made in the method the contractor — Accenture, the state confirmed Monday — used to create the earlier reports.

The original backlog reports only counted applicants when an eligibility determination hadn’t yet been made, Mosier wrote. The actual backlog, she explained, includes individuals who had received an eligibility determination in the past but who reapplied and are awaiting action on their new application.

The error in the earlier reports had been “investigated and reviewed,” Mosier wrote.

Angela de Rocha, spokeswoman for the KDADS, said the problem was tied to the state’s operating reports, not to a problem with the KEES system.

The system actually allowed the problem to be spotted, she said.

“Eligibility staff who were working individual cases noticed that the reapplications they were working on were not reflected in the system, or were reflected as ‘completed.’ They alerted management to the ‘missing’ cases,” de Rocha said.

The error was discovered about a week before the letter was sent, de Rocha said. She added the numbers had to be run again to verify.

“You can imagine the dismay,” de Rocha said.

In a statement, Accenture said it “continues to meet all of our contractual obligations for the Kansas Department of Health and Environment. We did not provide KDHE with inaccurate information.” The company said it provided the agency with the data as requested and that the agency then refined how it wanted the numbers and that the company worked with the state to revise the reports.

The adjustment to the backlog was sweeping. The total number in the backlog rose from 3,480 to 15,393.

The backlog is broken into time frames. Although all categories increased sharply, the number of applications awaiting processing for more than 45 days jumped the most, more than quintupling from 2,081 to 10,961.

Under Medicaid, states are generally required to determine eligibility within 45 days, except for disability.

Numerous states have experienced computer problems and worked through them, but under the law a state can’t delay providing an eligibility determination because of administrative problems, said Elizabeth Edwards, an attorney with the National Health Law Program. The organization advocates and litigates on behalf of patients throughout the country.

Reports of backlogs popped up across the country a couple of years ago, Edwards said, as several states sought to use funds available under the Affordable Care Act to revamp their Medicaid administrative functions.

“A lot of states seized that opportunity to update systems that a lot of times that were from the ’80s,” Edwards said.

North Carolina battled its own food stamp processing backlog in 2014 under its eligibility system, known as NC Fast. That system also was developed by Accenture.

The federal government chided a number of states in 2014 for Medicaid backlogs, targeting Alaska, California, Michigan, Missouri, Tennessee and Kansas.

“It’s been sort of an issue across the country, but it depends on the state on how they’re resolving the problem,” Edwards said.

Price to pay

Accenture will pay a price for undercounting the backlog, the state said. According to de Rocha, the state will withhold a $750,000 payment.

The total value of the company’s contract, which runs through 2021, is $264 million.

Mosier, in her June 10 letter, said the state had moved to retain all temporary staff who were scheduled to be released at the end of the month in response to the backlog revelation.

According to KDHE’s first status update to the federal government in March, KDHE and Accenture added 20 temporary full-time eligibility staff. Those staff will now stay on.

Sen. Laura Kelly, D-Topeka, said the state bears primary responsibility.

“When you outsource something, when you contract something, it’s your responsibility to make sure the job is getting done,” Kelly said.

Hawkins, the Wichita Republican, said he is seeking additional information from KDHE and KDADS.

“It surely is disappointing, and I’m getting calls from constituents that are having problems,” Hawkins said.

He indicated he also wants to know more about the Medicaid cuts announced by Brownback in May.

Brownback cut Medicaid provider reimbursement rates by 4 percent as part of budget-balancing measures. The cut itself saves the state about $38 million, but will cost providers much more because they also lose matching federal dollars.

Hawkins said he had approached legislative leadership a few weeks ago about the possibility of holding hearings during the special session, which begins Thursday, and was told no.

Spokeswomen for both House Speaker Ray Merrick and Senate President Susan Wagle said Monday they want the session focused narrowly on school finance.

The KanCare Oversight Committee is set to meet in early August.

Hawkins said he wants much of the meeting focused on both the Medicaid cut and the ongoing backlog.

The state hopes the backlog will have shrunk significantly by then.

“Despite this setback, the state believes its eligibility determination backlog issues will have been dealt with by the end of summer,” de Rocha said.

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