Report questions health claims of Medicaid privatization in Kansas

By Tim Carpenter, November 17, 2016

KanCare oversight committee Chair Rep. Dan Hawkins is shown speaking with Sen. Laura Kelly.

Rep. Dan Hawkins, chair of KanCare oversight committee and Wichita Republican,
chats with Senator Laura Kelly, D-Topeka, and ranking minority leader
on the panel. (Photo by Tim Carpenter / The Capital-Journal)

Frustration among legislators and Medicaid service providers with management of Kansas’ privatized system resurfaced Thursday in conjunction with a consulting firm’s report asserting the overhaul failed to deliver on promises of improvement in quality of health care.

The critique occurred as the administration of Gov. Sam Brownback faced a $350 million tax revenue shortfall in the current state budget and worked to develop new contracts with insurance companies running the $3 billion KanCare system serving 400,000 poor, disabled and elderly Kansans.

Brownback and Lt. Gov. Jeff Colyer shared confidence four years ago an approach directed by the private sector would foster better medical outcomes. Colyer, a Johnson County surgeon, vowed reform would “provide our most vulnerable Kansans with superior service at a more sustainable price.”

Robin Arnold-Williams, a consultant in the firm started by Republican Michael Leavitt, a Cabinet member under GOP President George W. Bush, informed a legislative oversight committee that KanCare generally achieved cost-restraining objectives by contracting with Amerigroup, Centene and United Healthcare.

However, Arnold-Williams said, KanCare hadn’t met “original rationale and commitments” in terms of elevating participants’ health.

“While cost-control benchmarks appear to have been met, providers question whether some of the ‘savings’ resulted from shifting costs to them,” Arnold-Williams said. “Among our findings were a lack of progress in improving physical health outcomes in identified target categories, limited integration of physical health, behavioral health and long-term services and supports, decreased stability of the (clinic) safety net and continued high levels of frustration on the part of providers.”

Eileen Hawley, a spokeswoman for Brownback, said an accurate portrayal of KanCare would show the transformation elevated health services to Medicaid recipients.

“KanCare has met its original care goals, including improved health outcomes, as well as its financial goals,” Hawley said. “The referenced report interviewed providers only; they did not interview beneficiaries. The actual data shows that primary care, dental, vision, transportation, and home and community based services have increased.”

Leavitt Partners produced the report by reviewing federal and state data and through interviews with KanCare providers at behest of the Kansas Medical Society, Kansas Association for the Medically Underserved and Kansas Hospital Association.

Representatives of these three Kansas organizations joined with other health groups to outline for House and Senate members of the KanCare oversight committee their views on administration of privatized Medicaid in Kansas. Many of the complaints surfaced in previous legislative hearings.

There was consensus the duplicative process of obtaining service-provider credentials from managed-care companies had to be standardized and centralized. In a strange twist, there was testimony KanCare providers encountered difficulty returning money to MCOs due to accidental overpayments while also enduring delays in receiving millions of dollars in appropriate compensation from those same companies.

William Voloch, president and chief executive officer of Wesley Medical Center in Wichita, said 45 percent of the Wesley system’s managed-care claims went beyond 90 days before receipt of payment. Half of these claims were denied initially, he said, but 99.7 percent of those initial rejections were later paid.

“When you factor in resources spent on both the MCO side and the hospital side, an overabundance of Medicaid funding then ends up spent on administration,” Voloch said. “If the MCOs were held accountable for processing claims correctly the first time, that would significantly reduce administrative waste.”

The managed-care companies inconsistently interpret and implement policies on claim payment, said Bob Finuf, vice president of Children’s Mercy Kansas City and a member of the Kansas Hospital Association’s advisory committee on KanCare. He said MCOs involved with KanCare had the audacity to deny payment for services previously authorized.

“The frustration level across the health care system in Kansas is immense. We all know we have problems,” said Wichita Republican Rep. Dan Hawkins, who serves as chairman of the committee.

Rep. Jim Ward, a Wichita Democrat on the committee, said organizations and companies providing direct services to Medicaid recipients should expect additional state budget reductions that could translate into shrinkage of health services, departure of providers from managed-care networks and closure of medical facilities. In July, Brownback slashed funding by 4 percent.

Ward suggested there might be severe health consequences, including preventable deaths, unless the Brownback administration reversed course on privatization of Medicaid.

“Bad news is coming,” Ward said. “I don’t think there is any question. More is coming.”

“The already stretched safety-net clinic system will be asked to do more with less,” said Denise Cyzman, executive director of the Kansas Association for the Medically Underserved, which represents 44 primary-care clinics. “This cannot be good for our clinics, our patients and communities they serve.”

“Do they just go home and die?” Ward said.

“It’s frightening,” Cyzman said. “You have our commitment we’ll do the best we can.”

Sean Gatewood, a former Topeka legislator who serves the KanCare Advocates Network, said problems with enrollment denials without proper notice of appeal, months-long delays in eligibility determinations, inconsistent care coordination and budget cuts were exacerbated by “weakened infrastructure” in the Kansas Department on Aging and Disability Services as well as the Kansas Department of Health and Environment.

“Under federal law and regulation,” Gatewood said, “these state agencies hold the responsibility for managing the Kansas Medicaid program. Both state agencies are extremely understaffed, inexperienced and under-resourced.”

Rachelle Colombo, a lobbyist with the Kansas Medical Society, said the original KanCare contract proposal stated the managed-care process wasn’t designed to add administrative burden for health providers, but “our experience has been the opposite.”

Contact reporter Tim Carpenter at (785) 393-2621 or @TimVCarpenter on Twitter.

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