A federal agency has instructed Kansas to halt a change in how the state reimburses providers of home and community-based support services, or HCBS, for people with disabilities.
But state officials say concerns expressed by the Centers for Medicare and Medicaid Services are based on false information.
“KDHE (the Kansas Department of Health and Environment) and KDADS (the Kansas Department for Aging and Disability Services) have asked CMS to reconsider the letter they sent because the letter is factually inaccurate,” Brandt Haehn, the commissioner of HCBS, said in a phone interview this week.
Disability service providers say CMS has it right and the state should pause a policy change that is making it difficult for some of them to stay in business.
At stake are Medicaid payments to hundreds of providers across the state who bill under the residential pay policy for services to Kansans with disabilities.
Until this year, they had been averaging payments based on their clients’ assessed needs on a 30-day-per-month schedule, regardless of whether they served the clients each day.
State officials announced their intention in May to allow billing only for actual days served. The change was part of cost-cutting measures to close a midyear budget gap.
Service providers said the change, which took effect Oct. 1, would cause an unsustainable hit to revenue.
Derek Laney, the CEO of a Johnson County provider called Kansas Focus, said this week in a phone interview that’s still the case.
“It’s a roughly 35 to 40 percent cut in reimbursement,” Laney said.
The policy change was one of two KDADS made to HCBS during the budget-balancing.
James Scott, an associate regional administrator in the Kansas City CMS office, sent a letter to state officials in October, saying they should halt implementation of the other change — known as the “capable person” policy — until CMS has reviewed it.
Megan Buck, another administrator in the Kansas City CMS office, sent a similar letter Nov. 8 to state officials about the residential pay policy change.
Buck wrote that the state must halt the residential pay change until it provides CMS more information about how it will affect “efficiency, economy and quality of care and sufficiency.”
Mike Randol, KDHE’s Medicaid director, responded with a Dec. 12 letter asking Buck to reconsider.
When the HCBS program began in 1991, the payments for residential care were never intended to be averaged over 30 days, Randol wrote.
Therefore, Randol wrote, the state is operating under Medicaid policies already approved by CMS.
Laney disputed that, saying the state had been processing payments on the 30-day average basis for years. He likened it to schools spreading teacher salaries over a calendar year, without regard to breaks.
Laney said CMS officials contacted him last week to ask if he could produce any evidence that the state had used that policy for residential pay.
“I was able to do that with two provider manuals,” Laney said.
Haehn said the state has been in contact with CMS since Randol’s letter went out but has not received an official answer on whether the federal agency will reconsider its order.
Any action by CMS to halt the policy change would be too late for one Johnson County provider. Vickie Vermillion operated Cornerstone Supports in Olathe until last month, providing supports for 19 adults with developmental disabilities.
She decided to close the company rather than try to adjust to the new residential pay policy, because reimbursement rates were already low.
Vermillion said via email this week that even if the state heeds the CMS request, she would not be able to reopen after helping her clients find other providers and her staff find other work.
Chad VonAhnen, executive director of Johnson County Developmental Supports, said his public agency had to request money from county commissioners to hire more staff to absorb some of Vermillion’s clients.
VonAhnen said the state had not told his agency about the Nov. 8 letter from CMS or the back-and-forth state officials are having with federal officials about the residential pay policy change.
He said he received a copy of the Nov. 8 letter last week from the Disability Rights Center, which obtained it through a federal Freedom of Information Act request.
“We haven’t seen any changes either from the state or from the (KanCare) managed care organizations on halting the implementation,” VonAhnen said. “We have a lot of questions.”