State Republicans want AG review of alleged Medicaid favoritism involving Lawrence group

? Three Republican legislators have asked Kansas’ attorney general to investigate a state agency decision to provide extra Medicaid funds to a nonprofit group with ties to the state Democratic Party chairman.

The legislators said Thursday they want to know whether the Department of Social and Rehabilitation Services “participated in Medicaid fraud.” Reps. Peggy Mast, of Emporia; David Crum, of Augusta, and Brenda Landwehr, of Wichita, sent a letter Wednesday to Attorney General Steve Six.

SRS Secretary Don Jordan decided in October 2008 to provide an additional $713,000 to Community Living Opportunities Inc. for the budget year ending in June 2009. The Lenexa group provides services for the developmentally disabled, and Medicaid covers its care.

Community Living’s board includes Kansas Democratic Party Chairman Larry Gates, a longtime ally of former Gov. Kathleen Sebelius, and a potential candidate for governor in 2010.

Jordan has said the money benefited the group’s clients and was justified because of their severe disabilities. But critics, including other providers, note SRS didn’t follow the normal process.

Questions arose in March when Sebelius, a Democrat who appointed Jordan, was awaiting U.S. Senate confirmation as federal health and human services secretary, who oversees Medicaid. Kansas legislators had a hearing but didn’t follow up.

Mast said Thursday she worries that if SRS violated Medicaid rules, Kansas could face paying federal penalties. She also said an investigation will encourage agencies to be careful in spending federal dollars.

“I just want to send a message to the agencies,” said Mast, the chairwoman of a House budget subcommittee on social services. “I think it’s probably better now than later.”

SRS spokeswoman Michelle Ponce noted that, at Jordan’s request, another agency commissioned an outside review. A report in May said Jordan had the authority to make his decision, which SRS and others saw as confirmation that no Medicaid fraud occurred.

“I’m confident that if the attorney general decides to review the decision, it will have the same outcome,” Ponce said.

Spokeswoman Beth Martino said Gov. Mark Parkinson, a Democrat who succeeded Sebelius, “fully supports” Jordan.

Community Living officials were reviewing the legislators’ statements Thursday before responding.

Documents have shown Gates e-mailed Sebelius’ chief of staff in July 2008 about Community Living’s funding issues. Jordan has said he had several conversations with Gates.

But Jordan has said Sebelius wasn’t involved in his decision, though she was briefed about it. Gates said Thursday he pushed only for a decision — not a specific outcome.

“I’m never going to apologize for advocating for the severely and profoundly disabled,” he said.

While the report in May said Jordan acted within his authority, it added that SRS bypassed the normal process of having one of 27 regional groups review each individual case. In that process, the regional group decides, and SRS handles appeals.

But Gates and other Community Living officials note some of the groups deciding who gets additional funds also compete with CLO for clients. The report said the state should consider scrapping the process so only SRS makes such decisions.

Meanwhile, Gates still is considering whether he’ll run for governor and said he assumes the GOP legislators have a political motive in asking for an investigation.

But Mast said politics aren’t involved because, “Accountability and state spending should be a nonpartisan issue.”