Prompted by rising costs that squeeze the state budget, Kansas plans to overhaul its Medicaid program — something that makes advocates for the needy and health care providers nervous as Gov. Sam Brownback’s administration looks for savings.
The Republican governor’s administration promises that its changes will achieve the savings without reducing coverage for the disabled, elderly or poor families or cutting payments to the doctors, hospitals, clinics and nursing homes. Brownback and his top advisers contend Kansas can avoid ugly choices made in other states by managing care better and more aggressively promoting healthy living.
Legislators and advocacy groups agree with the goals and see some promise in the initiative. But some remain skeptical that the changes will deliver the pledged savings in one of state government’s biggest annual expenditures. They say they’re nervous because they’re uncertain about how the changes will play out, particularly because Medicaid would be managed through private contractors.
The talk of change also is likely to make some Kansans covered by Medicaid uneasy. Jennifer Masenthin, a 29-year-old mother of three in Quenemo, a town of 400 about 35 miles southeast of Topeka, is grateful for the coverage Medicaid provides for her family. Her husband is a part-time farm worker, and she cares for their three young children, taking her oldest, a 9-year-old girl, to the Kansas City area for treatment of a disorder that has her body producing too much insulin.
“I’ve got something that is working well,” she said of their Medicaid coverage. “You shouldn’t have to stress.”
But state officials consider the current Medicaid program a source of financial stress as it covers health care for about 330,000 Kansans. Annual expenditures now approach $2.8 billion, and Brownback’s administration projects they’ll exceed $4 billion by 2017, without considering changes imposed by the federal overhaul of the health care system.
States are preparing for an expansion of Medicaid under the 2010 federal health care law championed by President Barack Obama, while worrying that because of its budget problems, the federal government will back off its traditional commitment to cover about 60 percent of Medicaid costs.
Other states, including Arizona, California and New Jersey, have sought to limit eligibility, reduce benefits or cut payments to health care providers. In 2009, then-Kansas Gov. Mark Parkinson, a Democrat, imposed a temporary 10 percent reduction in payments to providers.
Kansas Lt. Gov. Jeff Colyer, a surgeon and former state senator who led the task force drafting the plan, said Brownback, who took office in January, wants to avoid such decisions in the future.
“Give me a better option,” Colyer said. “I don’t see how cutting rates or cutting people off the system gets us better results.”
Brownback’s administration plans to have three private companies administer Medicaid statewide, with recipients choosing among the firms’ plans. The state already has two private contractors administering health coverage for poor and working-class families with children, but Brownback’s overhaul would pull in coverage of the disabled and elderly.
Bids from prospective contractors are due Jan. 31. The administration said three-year contracts, which start in 2013, will include goals, such as moving mentally ill and disabled Kansans into jobs, providing comprehensive care for diabetes and integrating physical and mental health care. The plan also is designed to ensure that Medicaid clients have a medical “home” and coordination among different providers.
The plan also includes reorganizations of the state’s health, aging, juvenile justice and social and rehabilitation services departments.
Brownback’s administration projects that the changes will reduce overall Medicaid costs by $29 million during the current fiscal year, which ends with June. By 2017, the total annual savings will be $277 million, the administration projects.
Many changes will be handled through the contracting process and in negotiations with the U.S. Department of Health and Human Services, Colyer said. Legislators will review the overhaul as they draft a state budget and must sign off on reorganizing state agencies.
Advocates said they don’t yet feel they have enough details about how the state will monitor whether the Medicaid contractors are meeting goals and worry about how the companies will work with groups that have traditionally provided services, particularly for the mentally ill and developmentally disabled. They’re concerned some providers won’t want to deal with three contractors if their administrative practices aren’t consistent.
“Is the administration leaving a back door open in case it doesn’t work out?” said Anna Lambertson, executive director of the Kansas Health Consumer Coalition.
Jerry Slaughter, executive director of the Kansas Medical Society, said the physicians it represents generally remain optimistic but still see a risk of reduced payments from the state if savings don’t materialize.
Colyer said he understands that advocates, health care providers and others are worried because, “nobody likes change.” But he said keeping the current system will inevitably force the state to cut coverage or lower providers’ payments.
“When you take those things off the table, then you’re left with doing this better overall,” he said.