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TOPEKA — A $1.2 million federal bonus payment will help trim the backlog of about 16,000 HealthWave applications that are pending at the Kansas Health Policy Authority's eligibility clearinghouse, officials were told today.

News of the award from the Centers for Medicare and Medicaid Services (CMS) was announced during Tuesday's monthly meeting of the health policy authority board.

"That's a big deal for us," said Andy Allison, the agency's executive director. "We feel like we now have a plan for dealing with the backlog."

“In recent years we’ve been doing things to make it smoother and more convenient for children to receive Medicaid and CHIP. But at the same time, as the economy worsened, we had a large increase in the volume of applications coming in along with some significant budget reductions. So the result is that we now have a large backlog of about 16,000 applications that have been waiting to be processed for more than 45 days,” said Barb Langner, state Medicaid director.

Agency officials recently submitted to CMS their plans for dealing with the backlog.

The bonus is part of an incentive program created by the 2009 federal Children's Health Insurance Reauthorization Act (CHIPRA). The bonus payments were established as an incentive for states to increase coverage of children under Medicaid and CHIP.

Langner said the bonus dollars will help pay for more temporary workers at the clearinghouse, which is operated under agency contract by Policy Studies, Inc. (PSI).

Langner said the agency hopes to eliminate the backlog within the next six months.

HealthWave is a Kansas-specific program that combines Medicaid and the Children's Health Insurance Program to provide health services for children in low- or moderate-income households.

During fiscal 2010, an average of 39,361 children were covered by CHIP any given month, a 10.5 percent increase over those enrolled in fiscal 2007, according to the agency's figures. Over the same period, the number of children in the Medicaid portion of HealthWave grew 23.5 percent, from 81,779 enrollees to 100,957.

Budget talk

In other discussion Tuesday, board members began parsing the agency's budget options for fiscal 2012, which begins July 1, 2011 and will be the subject of deliberations by the 2011 Legislature.

The state budget office has instructed all state agencies to submit reduced budget plans for 2012.

The health policy authority would need to cut $1.6 million from the general fund portion of its budget to meet budget office guidelines.

Allison told board members he was hoping that a new Medicaid-cost savings contract to be let sometime in the months ahead would allow the agency to make up the $1.6 million in savings either through stepped up beneficiary case management or perhaps from capitated-payment arrangements made with hospital/doctor groups or similar "accountable care organizations."

If that contract fails to produce enough savings or returns, he said, the only other way to meet the budget strictures would be to cut the rates the agency pays Medicaid providers.

"We don't know yet if vendors will be ready to tell us, 'Yes, we can save you that much money," Allison said.

He said the agency next month would start developing a request for proposal for the cost-containment services.

"We really don't want to recommend any reduction in Medicaid rates," he said.

Board members agreed to revisit the agency's budget issues during their September meeting.

The agency was instructed earlier this year by the Legislature to seek an "enhanced," Medicaid recovery contract, which would be separate and probably precede the cost-containment contract.

Legislators approved the agency's budget assuming the enhanced recovery contract, which has not yet been awarded, would generate $15.8 million in the current fiscal year. That assumption remains uncertain.

Other news

In other news Tuesday:

• Board members learned from Chairman Joe Tilghman that Allison has been nominated to be vice president of the National Association of State Medicaid Directors. That would place him among the handful of other Kansans playing key, national roles in the implementation of federal health reform. Former Gov. Kathleen Sebelius is secretary of the U.S. Department of Health Human Services. Also at HHS working on various elements of health reform are former KHPA board members Ned Holland and Kathy Greenlee. Kansas Insurance Commissioner Sandy Praeger is leading a key committee for the National Association of Insurance Commissioners that is drafting new regulations stemming from the health reform law. "There are quite a few Kansans working on this," said agency spokesman Peter Hancock.
• Roderick Bremby, a non-voting member of the health policy authority board told fellow members that the final version of the strategy and implementation plan for developing a statewide health information exchange will be presented Thursday at the e-Health Advisory Committee meeting. The plan will then be forwarded for review by the Office of the National Coordinator, which will likely trigger release of an $8 million federal grant to Kansas for purposes of advancing health information technology efforts here. "There's lots of good news there," Bremby said.