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Originally published June 27, 2012 at 1 p.m., updated June 27, 2012 at 4:26 p.m.
TOPEKA As part of the push by Gov. Sam Brownback to remake the state Medicaid program, Kansas officials today announced contract awards to three Medicaid managed care companies.
Kansas Medicaid serves about 350,000 Kansans at an annual cost of about $2.8 billion.
The program, if implemented as proposed, would be divided equally among the three companies, each of which will be expected to provide services statewide.
Brownback has said the chief aims of his proposed reforms, called KanCare, are to curb growth in state Medicaid spending while improving health outcomes for the people who rely on the program's coverage.
The three winning companies were Amerigroup, UnitedHealthcare and Sunflower State Health Plan, a subsidiary of Centene.
The unsuccessful bidders were WellCare and Coventry.
Coventry currently has a contract to provide managed care services through HealthWave, the state's program that covers children and pregnant women from low-income homes.
Officials have said HealthWave services will be rebranded and have been included as part of the overall KanCare contracts.
Speaking on background at a briefing with Statehouse news reporters, Brownback officials said that the best bids from the companies - the ones they selected - also were the ones with the lowest costs.
They said that with the contracts agreed to, they were revising upward KanCare's projected savings to the state and federal governments. They said they now anticipate $1 billion in savings over five years instead of the earlier forecast of about $850 million.
The contracts are for three-year terms with options to renew in years four and five.
Brownback officials said they expected to realize $673 million in state and federal savings during the first three years of KanCare. The state's portion of that would be about $293 million.
The officials said initial enrollment information for KanCare would be mailed to Medicaid enrollees in October and November.
They also said they remain confident they will be able to launch KanCare on Jan. 1, pending federal approval and reviews certifying that the contractors are ready. They plan to resubmit the needed Medicaid waiver application to federal authorities by late July.
Should their so-called Section 1115 waiver application be rejected, they said they would proceed with their reforms by pursuing other, more commonly granted Medicaid waivers.
All the companies that sought the contracts are major national players. A majority of U.S. Medicaid beneficiaries are enrolled in a managed care plan, as are about 70 percent of current Kansas enrollees.
KanCare would extend managed care to include long-term services for the elderly and disabled.
The contract awards have been anxiously anticipated by many of the state's Medicaid service providers. The providers have been heavily courted by the competing managed care companies as they have vied to develop the provider networks they will need to serve the state's thousands of Medicaid clients.
Federal officials must approve the contracts, rates and the Medicaid waiver before the Brownback administration may implement the makeover plan first announced last November.
Brownback officials said they didn't wait for the Centers for Medicare and Medicaid Services to approve the contracts before announcing today's bid awards so that the companies would have more time to develop their provider networks in time for the program's anticipated launch.
KanCare would shift virtually all of the state's Medicaid enrollees into fixed-rate managed care plans.
If the administration's plan is implemented as proposed, Kansas would be the only state where managed care companies provide care statewide to all Medicaid enrollees.
Administration officials said they remained confident they will secure the needed federal approvals because the various elements of their plan have been approved for other states.
Among the plan's key elements:
● Three private companies will have financial responsibility for improving health outcomes and controlling the costs of medical care for all Kansans in Medicaid or the Children's Health Insurance Program.
● All Kansans in Medicaid will be assigned to one of three companies' plans after January 2013 except for the long-term services provided to the developmentally disabled. Those services would be included in KanCare the following year.
● The companies will be responsible for all Medicaid services currently available and required to pay at least the current Medicaid rates. Brownback officials said one of the new services that will be provided as a result of the contract is coverage for adult heart and lung transplants. Currently, the program covers those transplants for children but not adults. The University of Kansas Hospital seeks to resume its heart transplant program, and the new contract provisions are expected to boost those efforts. Currently, heart transplants for Kansas children on Medicaid typically are done in Omaha. Officials said bariatric (weight-loss) surgeries also would be covered and that each of the three contractors had agreed to provide adult preventive dental services.
→ House GOP leaders pen letter backing DD supports in KanCare (5/17/13)
→ More than 1,000 rally at Statehouse for DD carve-out (5/8/13)
→ Nothing to be done about coverage gap in states not expanding Medicaid, feds say (4/29/13)
→ As KanCare continuity of care period ends, problems persist; legislators starting to hear about it (4/8/13)
→ Advocates raise concerns over possible reductions in KanCare services (3/28/13)
→ Conferees agree on KanCare oversight committee (3/28/13)
→ DD advocates push to extend KanCare "carve-out" (3/20/13)
→ Safety-net clinics struggling with KanCare (3/4/13)
→ Major medical provider groups ask for longer KanCare transition (2/13/13)
→ Lawmakers and providers assess KanCare transition (1/28/13)
→ Five-part series: "Lower cost and better care: Can KanCare deliver?" (1/14/13)
→ Independence of KanCare ombudsman questioned (1/7/13)
→ KanCare special terms and conditions spelled out by CMS in a document (12/28/12)
→ KanCare workforce shift hampering local agencies (12/10/12)
→ Governor announces KanCare approval by feds (12/7/12)
→ More KanCare implementation details outlined (12/3/12)
→ Federal officials say they hope to act soon on KanCare waiver request (11/28/12)
→ New KanCare info included on state website (11/20/12)
→ Groups call for KanCare delay (11/8/12)
→ Go/no-go date looms this week for KanCare (10/15/12)
→ KanCare benefit packages outlined (9/26/12)
→ Provider groups nervous about lack of KanCare details (9/13/12)
→ KanCare Confidential (9/10/12)
→ KanCare contracts awarded (6/27/12)
→ KanCare plan panned again at public hearing (6/20/12)
→ Wichita KanCare forum draws more than 200 (6/19/12)
→ Medicaid makeover: Can Kansas learn from Kentucky? (6/11/12)
→ Hundreds protest inclusion of disability services in KanCare (4/25/12)
→ Counties weighing in on KanCare (4/9/12)
→ Hospital administrator to chair KanCare Advisory Council (3/29/12)
→ Brownback Medicaid makeover an “ambitious” plan (3/28/12)
→ KanCare bidders heavily courting Medicaid providers (3/19/12)
→ Legislators push to delay KanCare start (3/7/12)
→ Brownback announces managed care for all in Medicaid (11/8/11)
→ Kansas Medicaid makeover in the works (3/7/11)
→ Full Medicaid and KanCare coverage
The KHI News Service is an editorially independent initiative of the Kansas Health Institute and is committed to timely, objective and in-depth coverage of health issues and the policy making environment. Find more about the News Service at khi.org/newsservice or contact us at (785) 783-2529.