TOPEKA — The steering committee that is developing the plan for a Kansas health insurance exchange will move at a slower pace after the administration of Gov. Sam Brownback called for delay in selecting a key exchange vendor.

The initial plan, as spelled out earlier this year by Kansas Insurance Commissioner Sandy Praeger, had been to issue a request for proposal (RFP) for a vendor sometime in July.

The administration, however, asked Praeger to delay that process until the 2012 Legislature has weighed in on the plan crafted by the committee, which includes dozens of representatives of the insurance and health industries and other interested parties.

The delay in choosing a vendor won't be a setback, said Linda Sheppard, director of the insurance department's accident and health division. The steering committee had been pressing to complete many plan details to be ready for the July RFP, but now will have more time.

"I think we view it as just a different approach," Sheppard said.

Praeger said the Governor's Office was concerned about moving "too quickly" on a specific RFP until the Legislature signed off on the insurance exchange plan, which the steering committee aims to have in hand by early fall.

"It's not terribly surprising," Praeger said. "We don't want to move forward on something we technically don't have approved."

K-Med

Meanwhile, work on modernizing the state's computerized Medicaid enrollment system is moving ahead of schedule, said Gary Schneider of Salvaggio, Teal & Associates, an Austin, Texas-based information technology firm that is advising the insurance department and state Medicaid officials on the technical issues of implementing an exchange.

The new Medicaid system, which is being called K-Med, will be the underlying system for the insurance exchange, Schneider and Sheppard told KHI News Service.

"We're looking at an earlier completion date," for the Medicaid portion, Schneider said, with the timeline for launching K-Med now scheduled to begin in the second quarter of 2013.

Schneider said the administration is in the process of choosing between two vendors for the K-Med system and will announce the award winner sometime next month. He wouldn't disclose the finalists or potential contract terms, citing confidentiality issues.

"We're in the quiet period," he said. "We're about ready to make an award."

"All up in the air"

The federal health reform law requires that each state have a health insurance exchange operating by January 2014, or else surrender that responsibility to the federal government.

The exchanges, as currently envisioned, will be Websites where millions of Americans, including an estimated 1.55 million Kansans will be able to shop for subsidized private health insurance or enroll in government programs such as Medicaid and the Children's Health Insurance Program.

The U.S. Department of Health and Human Services has yet to issue the regulations that will govern the exchanges and without them Kansas planners said their work had been hindered.

"It's all up in the air," said former Attorney General Bob Stephan, a member of the steering committee, after hearing updates from leaders of the committee's various workgroups, many of whom said their recommendations or study results were fuzzy pending issue of the regulations, which are expected sometime in the next 30 days.

Innovator state

That said, general guidelines, are known and have been elaborated upon in private meetings between HHS and state officials. Sheppard told the group she had participated in meetings earlier this month in Denver with HHS officials and those from other "innovator" states who are trying to map out how the exchanges will work.

Kansas was among the handful of states that were given "innovator" grants by HHS with hopes that exchange planning here could then serve as a model for other states.

Kansas was given $31 million as its exchange innovator grant, which will be used to help pay for the anticipated $62 million cost of the K-Med system. Also available to help finance K-Med is $13 million from a separate federal grant that was scaled back from $40 million as the result of recent federal budget cuts, Schneider said.

K-Med, Schneider and Sheppard said, essentially will serve as the foundation for whatever Web-based exchange Kansas subsequently unfurls to include private insurance plans.

Thick or thin

In other news from Monday's meeting:

Committee members agreed that there should be a single exchange that includes individual and small group insurance plans. But they had trouble agreeing on whether the exchange should be "thin," offering only the minimum required by the federal reform law or "thick," offering additional features.

Supporters of a thin exchange said it would be difficult enough to launch a basic system and that additional features, if needed, could be added later. But others said they worried early choice of a "thin" exchange would shut the door or make it more difficult to include features that might prove helpful to consumers.

Several legislators attended the meeting, including Rep. Brenda Landwehr, R-Wichita, chair of the House Health and Human Services Committee. Landwehr will serve as chair of the exchange committee's Medicaid integration work group.

Landwehr told fellow member that she wanted to be sure whatever plan is developed includes elements that will help curb health care costs.

"I'm not a proponent of the Obamacare plan by any means," she said. "But if we're going to have to do it, let's do it right. Let's be innovative and think about how do we get to the cost factor. Let's not allow ourselves to be boxed in by the federal government."