KHI News Service

Kansas Medicaid providers complain to oversight committee

Payment delays and claims denial problems persist in new KanCare system

By Mike Shields | October 07, 2013

Spokespersons for a broad range of the state's Medicaid provider groups complained to a legislative oversight panel today about problems they are having with KanCare, most of them related to delayed or disputed claims for payment.

"Claims are being overpaid, underpaid, and in some cases not being paid at all," said Tom Bell, chief executive of the Kansas Hospital Association, testifying to the first meeting of the Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.

"Not only do these reimbursement issues cause cash flow problems for our providers, they also require significant staff time to monitor and track through patient accounting systems when claims have to be reprocessed due to incorrect payments," Bell said.

'Real problems you can't wish away'

Bell was the first of the provider representatives to testify. Then came a bunch of dittos from groups ranging from the Kansas Medical Society — which represents most of the state's doctors — to the lobbyists for the nursing home industry. Many who testified spoke directly, but some, such as the medical society, merely turned in written testimony.

"It is of no value to whine and complain, but there are real problems you can't wish away," said lobbyist John Federico on behalf of the Kansas Health Care Association and Kansas Center for Assisted Living, which represents more than 200 nursing home or similar facilities across the state.

Legislators, Republicans and Democrats, picked up on the complaints or echoed them and raised the toughest line of questioning since the KanCare program was unveiled as a proposal by Gov. Sam Brownback late in 2011.

KanCare was launched Jan. 1 this year. With it, virtually all the state's 380,000 Medicaid enrollees were moved into managed care plans run by three large insurance companies: Amerigroup, UnitedHealthcare and Sunflower State Health Plan, a subsidiary of Centene. Each of the companies is a major player in the national Medicaid managed care industry.

Progress on pharmacy price lists

Perhaps the mildest criticism came from spokesmen for the state's retail pharmacy industry, a group that earlier in the transition to KanCare was among the more vocal about the problems it was experiencing with the new program.

Peter Stern, chief executive of the Kansas Independent Pharmacy Service Corp., said there had been some progress with getting the managed care companies to publish and frequently update the lists of their reimbursement rates for prescriptions (known in industry jargon as Maximum Allowable Cost tables, or MACs.)

Stern said two of the KanCare companies were now publishing the lists on the state's official KanCare website, which allowed pharmacists to go back to the effective dates of their KanCare claims and resubmit those for which they had been underpaid.

But he said problems persisted in getting proper and timely reimbursements for durable medical equipment, such as wheelchairs, sold at pharmacies.

Dulcinea Rakestraw, chair of the Kansas Association of Addiction Professionals, testified that KanCare so far was working well for "substance abuse treatment consumers," such as pregnant women who gained care coordinators and that "in general, Medicaid consumers have seen little or no change in the services they receive."

Problems change, frequency continues

But she said administrative costs and burden for agencies that provide substance abuse treatment had gone up.

"The problems may change, but the frequency continues," she said of her members' dealing with the KanCare managed care companies.

Among the other groups or providers describing problems or concerns with KanCare were the Kansas Psychological Association, National Association of Social Workers-Kansas Chapter, Kansas Health Care Consumer Coalition, Oral Health Kansas, Kansas Cavity Free Kids, Jenian Inc., Kansas Advocates for Better Care, Delaware Highlands Assisted Living, The Kansas Home Care Association, Interhab, Sabetha Community Hospital, Leading Age Kansas, and the Kansas Association of Centers for Independent Living.

A couple of Medicaid consumers, including former Kansas City Star reporter Finn Bullers, appeared before the committee to describe problems they had experienced or anticipated and Committee members also voiced concerns with the program.

From left to right: Sen. Mary Pilcher-Cook (R-Shawnee), Rep. David Crum (R-Augusta), and Rep. Willie Dove (R-Bonner Springs).

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"I'm hoping at the next hearing that we'll hear some improvement on (Medicaid) claims processing," said Rep. David Crum, an Augusta Republican who has been one of the administration's stronger supporters on KanCare.


Sen. Laura Kelly of Topeka, the committee's ranking Democrat, raised repeated questions about the effectiveness and independence of the KanCare ombudsman's office, which is part of the Kansas Department for Aging and Disability Services.

She said she had heard from numerous Medicaid consumers and providers who said they no longer called the office because they knew it wouldn't do any good. The ombudsman is James Bart.

She said people told her that Bart is "a nice man" but as a one-man office lacked the resources to deal with the problems they brought him.

Bart told the committee he had fielded 1,318 "documented contacts" from people with concerns since Jan. 1, the majority of which were of "unspecified subject matter," according to the agency's categorization method.

He said he was in the process of hiring a second person to produce more detailed reports that would better demonstrate the number and nature of the concerns he has helped resolve or handled.

Defending KanCare

Shawn Sullivan, secretary of the Kansas Department for Aging and Disability Services, said the number of people in nursing homes had dropped by 200 since KanCare launched, which he interpreted as evidence that the managed care companies were helping keep more people out of institutional settings.

Shawn Sullivan, secretary of the Kansas Department for Aging and Disability Services, at today's KanCare Oversight Committee meeting, along with Kari Bruffett — center, director of the Health Care Finance Division at the Kansas Department of Health and Environment — and KanCare Ombudsman James Bart (far right)

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"The managed care companies are going to do what they need to do to help people stay out of institutions," he said, among other reasons because it is in their financial interest to do so given the terms of the state's contracts with the companies.

He said the administration also was seeing better care integration.

Kari Bruffett, director of the Division of Health Care Finance at the Kansas Department of Health and Environment, said agency records showed that the rate of claim denials by the KanCare companies, 16.68 percent, was in line with the denial rates of the state's former HealthWave managed care companies and less than the 28 percent denial rate when the state handled most of the Medicaid claims.

But administration officials said they were pushing for improvements in claims processing and representatives of the KanCare managed care companies said they were refining their payment systems and stepping up their customer service training. They acknowledged there had been problems with provider reimbursements.

"We will continue to diligently work these (top system issues) and individual provider concerns," said Jean Rumbaugh, chief executive of Sunflower State Health Plan.

"The message I've heard today is that it's not working," said Rep. Jim Ward, a Wichita Democrat and early critic of the initiative.

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KHI News Service coverage of KanCare

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Kansas Medicaid providers complain to oversight committee (10/7/13)
Wichita hospital execs describe problems with KanCare (8/29/13)
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KanCare Confidential (9/10/12)
KanCare contracts awarded (6/27/12)
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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)
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