State officials push back against audit criticizing KanCare data

photo by: KanCare logo


TOPEKA – State officials said Monday that they will not seek damages against a contractor who they say has been responsible for long delays in processing Medicaid applications, in part because an audit report released earlier this year undermines any legal case they might try to make.

Kansas Department of Health and Environment Secretary Jeff Andersen had previously told a legislative oversight committee that his agency would seek what are called “liquidated damages” against Maximus, the company that manages the Medicaid application clearinghouse.

On Monday, however, he told the same committee that KDHE would not pursue those damages, in part because of the audit report.

“If you’re going to sue Maximus for nonperformance, it’s essentially, in a court of law, our data against their data,” Andersen said. “And here, our own state has gone national … saying our data is not credible. I wouldn’t want to go into a court of law trying to win a case when our own team is saying our data is not credible.”

Andersen was responding to a Legislative Post Audit report that was intended to determine whether, in fact, the state had actually saved money by converting its Medicaid program into a privatized managed care system now known as KanCare, and whether the new system was resulting in better health outcomes for Medicaid recipients.

But auditors said they could not fully answer those questions due to what they called “a lack of reliable Medicaid data.”

Jonathan Hamdorf, the state’s Medicaid director, said that was an unfair criticism of the state’s program.

“I work and I live in the Medicaid community. I speak with Medicaid directors all the time, I work with CMS (the Centers for Medicare and Medicaid Services) all the time. There are data issues, period,” Hamdorf said.

“So I guess my challenge is, why do we raise our hand and say our data is so much worse when CMS says, ‘Yeah, pretty much everybody’s data isn’t very good,'” he added. “And I don’t think that is doing us favors nationally by calling that out.”

KanCare began in 2013 under then-Gov. Sam Brownback’s administration, but it was primarily designed by his lieutenant governor at the time, current Gov. Jeff Colyer, who took over the job in January when Brownback resigned to accept a diplomatic post in the Trump administration.

Under KanCare, Medicaid recipients are given a choice of enrolling with one of three private, for-profit insurance companies to manage their care. Those companies are paid flat, per-person fees to manage each person’s care and reimburse health care providers.

The system was intended to control costs and improve health outcomes by encouraging Medicaid recipients to have more regular checkups and obtain preventive care in order to avoid costly emergency room visits and hospital stays.

The audit found that since 2013, overall Medicaid costs have remained stable at about $2.7 billion a year, which includes both state and federal funds, and that per-person costs have actually declined slightly over that period.

But the report said there was insufficient data to show that the KanCare model itself was responsible for that as opposed to other factors, such as changes in the demographic makeup of the state’s Medicaid population.

Kansas was given a three-year waiver from the traditional fee-for-service Medicaid model to operate KanCare as a “demonstration” project. The state was later given a one-year extension, and the waiver is now set to expire Dec. 31.

The Colyer administration, though, is seeking another three-year waiver, and it recently awarded contracts to three companies to begin managing the program on Jan. 1, 2019.

Colyer, however, lost his bid for the Republican nomination to run for a full term as governor, so the responsibility of running KanCare will fall to the next governor.

State Sen. Laura Kelly, a member of the oversight committee and the Democratic nominee for governor, has been critical of the KanCare model overall, particularly the system of contracting with private insurance companies.

After Monday’s meeting, however, Kelly told reporters she would be cautious about making major changes quickly.

“I’m not going to do anything — the next administration shouldn’t do anything drastic because we’d need to make sure there is a plan in place so that people can transition from one structure to the other with no gap in service,” Kelly said.


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