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On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to KHI.org.

Report: KanCare delivered on cost, not quality of care

By Andy Marso | November 17, 2016

Report: KanCare delivered on cost, not quality of care
Photo by Andy Marso/KHI News Service Rep. Dan Hawkins, a Republican from Wichita, is chair of the Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight. Hawkins says a 4 percent cut in provider reimbursements will worsen problems like access to care under the managed care Medicaid program.

Editor’s note: This story was updated at 3:30 p.m. Nov. 17.

An analysis of KanCare performed by a former Republican governor’s think tank found that the switch to managed care Medicaid in Kansas has delivered on cost-cutting promises but not on quality of care.

Leavitt Partners, a policy consulting shop founded by former Utah Gov. Michael Leavitt, performed the analysis between May and October by interviewing KanCare providers and reviewing federal and state data.

“Across the providers that we interviewed and surveyed, there was general agreement that KanCare has not met its original rationale and commitments,” Robin Arnold-Williams, a principal at Leavitt Partners who specializes in Medicaid, said in a written summary of the analysis. The Kansas Hospital Association, Kansas Medical Society and Kansas Association for the Medically Underserved sponsored the analysis.

Arnold-Williams, a former executive director of the Utah Department of Human Services, testified Thursday at a meeting of the Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.

She told legislators that better communication among state officials, KanCare companies and Medicaid providers is key.

Photo by Jim McLean/KHI News Service Robin Arnold-Williams is a principal who specializes in Medicaid for Leavitt Partners, a policy consulting shop that analyzed the KanCare system at the request of the Kansas Hospital Association, Kansas Medical Society and Kansas Association for the Medically Underserved. Arnold-Williams spoke Thursday before the Legislature’s KanCare oversight committee.

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“Providers are not saying, ‘We’re fed up. We don’t want to help improve this,’” Arnold-Williams said. “They’re saying, ‘We’re ready to improve this system. We want it to be the best it can be for Kansans who are on Medicaid.’”

The committee of legislators is in the midst of two-day review of KanCare to seek input from providers about how the system should change as the state pursues permission from the federal government to extend the program after 2017. 

“We all know we have problems,” said Rep. Dan Hawkins, a Republican from Wichita who chairs the KanCare oversight committee. “The frustration level across the health care system in Kansas is immense right now.”

Gov. Sam Brownback’s administration started KanCare in 2013, placing all of the state’s 400,000-plus Medicaid recipients under the administration of three private insurance companies.

Brownback said the program would save the state $1 billion in Medicaid costs over five years without reducing eligibility, covered services or provider payment rates. The cost savings would instead be realized by coordinating care to improve Medicaid clients’ health.

However, payment rates for most providers were cut by 4 percent this year as Brownback and the Legislature struggled to keep the state budget balanced.

Arnold-Williams said the Leavitt Partners analysis determined that although cost-control benchmarks have been reached, KanCare has not delivered on coordination of physical health, behavioral health and daily support services for people with disabilities or met targets for improved health outcomes.

Hawkins said the 4 percent cut has caused a provider outcry across the Medicaid system and restoring it would be one of his top priorities.

Any problems within KanCare will be worsened by the cut, Hawkins said, if it causes providers to drop out of the system.

“We’re going to get into an access problem really quick if we’re not already in an access problem,” he said.

Rep. Jim Ward, a Democrat from Wichita, said providers should brace for more cuts.

The state has to close a $350 million budget hole in the next six months, he said, before moving on to addressing a projected $600 million hole for the fiscal year that starts in July.

“I don’t think there’s any question that more is coming,” said Ward, who favors reversing a 2012 income tax plan spearheaded by Brownback that reduced state revenue by about $700 million.

“We’re going to get into an access problem really quick if we’re not already in an access problem.”

- Rep. Dan Hawkins, a Republican from Wichita who chairs the Legislature’s KanCare oversight committee

Amy Campbell, a lobbyist for the Kansas Mental Health Coalition, told the committee that the 4 percent cut and other funding reductions have caused the state’s mental health system to become increasingly frayed.

Rachel Monger, a lobbyist for LeadingAge Kansas, which represents nonprofit providers of aging services, said nursing homes are absorbing people with mental health problems who have nowhere else to go.

“It is an extremely poor fit, on both sides,” Monger said.

The Leavitt Partners report said KanCare providers already were feeling strained by the managed care switch and the reimbursement cut could be a last straw for some.

“While cost-control benchmarks appear to have been met, providers question whether some of the ‘savings’ resulted from shifting costs to them,” Arnold-Williams said. “Recent provider rate reductions, running contrary to original KanCare commitments, have escalated these concerns and are causing some to assess their ability to remain Medicaid providers.”