The 2023 session began on Monday, January 9, following the swearing in of Gov. Laura Kelly for her second term of office, along with all members of the House, including 32 who are new, and two members of the Senate. The day after being sworn in, Gov. Kelly tested positive for COVID-19 and announced that her planned State of the State address would be rescheduled to January 24. Two days later, after several negative tests, it was determined that she did not have COVID-19, and she returned to work at the Capitol on Friday, January 13.
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Prior to the start of the session, the Kansas Department of Revenue announced on January 3 that state revenue collections in December 2022 were $1.1 billion, which was $140.1 million, or 14.8 percent, more than the monthly estimate. Including December’s collections, the state has collected $105 million above the estimates for Fiscal Year (FY) 2023. Also on January 3, Gov. Kelly announced that Budget Director Adam Proffitt had been appointed Secretary of Administration but would continue in his role as budget director.
On January 5, Senate President Ty Masterson announced that Sen. Beverly Gossage was replacing Sen. Richard Hilderbrand as chair of the Senate Public Health and Welfare Committee, following his resignation effective on January 8.
On Friday, January 6, the Legislative Budget Committee, chaired by Sen. Rick Billinger, received an update from Ethan Belshe, Director of Public Affairs for the Office of Recovery, regarding recent action taken on COVID-19 relief funds by the Strengthening People and Revitalizing Kansas (SPARK) Executive Committee. Belshe stated that on December 21, 2022, the State Finance Council approved a total of $374 million in COVID-19 relief funds for broadband infrastructure and adoption, the modernization and improvement of government services, economic development, and health and education initiatives recommended by the SPARK Executive Committee. Included in the health and education initiatives is $66 million for health facilities and program expansion, $38 million for child care and community resource capacity accelerator, and $5 million for early childhood data integration and system enhancements. Belshe noted that additional details on the competitive funding opportunities, including the timeline and process to apply for funding through the approved programs, will be coming from the administering agencies by the end of February.
The Committee also heard from Christine Osterlund, Deputy Director of Medicaid Operations, Kansas Department of Health and Environment (KDHE), who provided an overview of the impact of the federal Omnibus Appropriations bill, passed in late December, on the Federal Medical Assistance Percentage (FMAP) for Medicaid. Osterlund noted that during the federal Public Health Emergency (PHE), Kansas received a temporary increase to the FMAP rate of 6.2 percentage points. Under the Omnibus Act, the temporary increase in FMAP will be phased-down over calendar year 2023 and is phased-out entirely at the end of 2023. During the PHE, states did not terminate Medicaid eligibility unless (1) the beneficiary moved out of state, (2) the beneficiary died, or (3) the beneficiary asked for coverage to be terminated. As a result, the number of Kansans receiving Medicaid and Children’s Health Insurance Program (CHIP) benefits has increased significantly since March 2020. Osterlund stated that in February 2020, 405,716 individuals were enrolled in KanCare programs, but on November 1, 2022, 530,482 individuals were enrolled. Kansas will begin processing annual redeterminations for KanCare eligibility in April 2023 and will have up to 12 months to initiate all redeterminations for individuals enrolled in Medicaid and CHIP. After the process is completed, KDHE estimates enrollment will be closer to the pre-PHE level.
On Tuesday, January 10, Gov. Kelly signed the first Executive Order (EO) of the year, EO No. 23-01, that will establish an Early Childhood Transition Task Force. The 13-member Task Force will include the Secretaries, or designees, of KDHE and the Kansas Department for Children and Families (DCF), the executive director of the Kansas Children’s Cabinet and Trust Fund, the Commissioner of Education, and representatives of state or local chambers of commerce, philanthropic organizations, early childhood service providers, and advocacy organizations. The Governor also may invite two members from each of the Senate and the House to participate as full voting members. The mission of the Task Force is the creation of a framework for a model single-agency governance structure for early childhood programming that consolidates initiatives and funding under the leadership of a new cabinet-level position, and the Task Force is specifically charged with conducting an analysis of the current early childhood delivery system in Kansas and how it is financed, with a specific focus on gaps, inefficiencies, and redundancies. The Task Force will conduct a series of stakeholder engagement meetings to elicit feedback on the current early childhood governance structure and to better understand the needs of parents, families, providers and businesses, and draft a transition plan to ensure the continuous operation of state services upon the creation of the new state agency. An interim report to the Governor is due on July 1, 2023, and the Task Force’s final report is due on January 1, 2024.
Also on January 10, Speaker of the House Dan Hawkins and Senate President Ty Masterson held a press conference and announced an eight issue legislative agenda – “A Better Way” – for 2023. The agenda included several health-related issues, including less governance of healthcare, ending mandates and supporting crisis pregnancy centers.
On January 12, the Governor submitted her revised budget recommendation for FY 2023 and initial budget recommendation for FY 2024. The $9.49 billion State General Fund (SGF) budget for FY 2024 includes full and immediate elimination of the state sales tax on food, effective April 1, 2023; exempting diapers and feminine hygiene products from state sales tax; creating an annual sales tax holiday for back-to-school items in August; and expanding Medicaid to low-income adults. Full details are available in the Governor’s Budget Report.
House Health and Human Services Committee
(Rep. Brenda Landwehr, Chair)
On Tuesday, January 10, the Committee heard a presentation from Chad Austin, President and CEO, and other representatives of the Kansas Hospital Association (KHA), regarding the history of KHA, the number of community hospitals currently operating in Kansas (123), the Kansas health ranking (25th to 32nd in the country), the breakdown of payments to hospitals by payer (43 percent Medicare, 14 percent Medicaid, 33 percent commercial/private payers, 10 percent self-pay), the implementation of the rural emergency hospital model, workforce challenges (nurse and other hospital staff shortages) and possible solutions, KHA’s legislative priorities, and hospital finance challenges ($1 billion of bad debt and $257 million of charity care provided in 2019). Committee members asked questions regarding incentives for hospitals to consider the rural emergency hospital model, the percentage of Kansas critical access hospitals in financial jeopardy (55), implementation of the federal No Surprises Act, incentives for students to enter the healthcare profession, alternatives to the mental health observation program, and ways to address hospital concerns regarding prior authorization requirements.
Senate Public Health and Welfare Committee
(Sen. Beverly Gossage, Chair)
On Tuesday, January 10, the Committee heard an overview of the Behavioral Health Services (BHS) Commission by Andy Brown, BHS Commissioner, Department for Aging and Disability Services (KDADS), including the BHS organization and significant achievements over the last five years. Brown noted that KDADS has certified nine certified community behavioral health clinics (CCBHCs) to date and is on target to onboard nine more by July 1, 2023. He also stated that of the 36 high-priority recommendations of the Special Committee on Mental Health Modernization and Reform (MHMR), 16 have been fully implemented and significant progress has been made on nine more. Objectives for the next four years include: increasing access to services, expanding Medication Assisted Treatment among substance use disorder (SUD) treatment programs, investing in social determinants of health, improving integration of behavioral health services into other forms of healthcare, addressing frontline workforce shortages, creating additional specialty court programs across the state, and expanding problem gambling treatment and prevention, mobile crisis stabilization, suicide prevention infrastructure and opioid use disorder treatment/prevention.
On Wednesday, January 11, the Committee heard presentations from several KDHE officials. Secretary Janet Stanek provided an overview and highlighted priorities from the State Health Improvement Plan, including improving health and health outcomes, access to care, healthy behaviors, health literacy, and public health funding and capacity and highlighted the $30 million in Health Resources and Services Administration (HRSA) funding available to strengthen the public health workforce.
Deputy Secretary of Public Health Ashley Goss reviewed the 2023 priorities for the Division, including Healthy Kansans 2030 and public health accreditation. Healthy Kansans 2030, launched in 2021, is a statewide health assessment and strategic plan to improve the health and well-being of Kansas residents. National public health accreditation is reapplied for every five years. Kansas is ranked 31st in America’s Health Rankings.
Medicaid Director Sarah Fertig, Division of Health Care Finance, presented an overview of the Division’s responsibilities, including Medicaid application processing, oversight of the three managed care organizations (MCOs), program integrity oversight and compliance with federal Medicaid rules. Significant projects for 2023 include shifting from the umbrella Section 1115 demonstration to a 1915(b) waiver and a small 1115 demonstration, focus on prenatal care and maternal/child health outcomes, and the rebidding of Medicaid managed care contracts.
On Thursday, January 12, the Committee heard presentations from representatives of the Kansas Legislative Research Department (KLRD) about articles in the Kansas Legislator Briefing Book 2023. Briefing book articles are short summaries of topics of interest to legislators. Elizabeth Cohn, Senior Research Analyst, and Iraida Orr, Principal Research Analyst, presented six articles on health-related topics, including COVID-19 vaccine mandates, fentanyl testing strips, KanCare waivers and MCO contracts, mental health beds for adults and children, and mpox.
Child Welfare and Foster Care Committee
(Rep. Susan Concannon, Chair)
On Tuesday, January 12, the newly formed Child Welfare and Foster Care Committee met for the first time and heard a round of introductions from state, local and regional child welfare organizations including the Kansas Children’s Cabinet and Trust Fund, DCF, Kansas Division of the Child Advocate, Kansas Appleseed, Kansas Family Advisory Network, Children’s Alliance of Kansas, DCCCA, St. Francis Ministries, FosterAdopt Connect, KDC Kansas, InterHab, the Association of Community Mental Health Centers of Kansas, TFI Family Services, Kansas Children’s Service League, Boys and Girls Clubs of Kansas, Cornerstone of Care, and Children’s Advocacy Centers of Kansas.
Stuart Little, Little Government Relations, on behalf of the Kansas Chapter, American Academy of Pediatrics, requested introduction of a bill that would establish the statewide care or child abuse review and evaluation provider network. During the 2022 session, a similar bill passed the House but died during conference committee. A hearing on HB 2024, which will make it legal for infants and children to be surrendered to baby boxes rather than a person, will be held on January 23.
Welfare Reform Committee
(Rep. Francis Awerkamp, Chair)
On Tuesday, January 10, the newly formed Welfare Reform Committee met for the first time. The meeting included committee and staff introductions, a review of committee rules, a discussion on the committee’s purpose and scope, an overview of the components of welfare reform, and a presentation on the history of recent state welfare program reforms.
The purpose and scope of the new committee is to understand and evaluate the current welfare system in Kansas and to explore opportunities for improvement and returns on investment for both those receiving benefits and those paying for those benefits. The Committee will focus on traditional welfare programs such as Temporary Assistance for Needy Families (TANF) and the Supplemental Nutrition Assistance Program (SNAP) but may also discuss larger and more complex welfare programs, such as corporate welfare. Chair Awerkamp stated that the Committee will not interfere with or duplicate the efforts of other committees, particularly those focused on unemployment, foster care, and health.
The Committee will utilize a six-component framework when reviewing a social welfare program for opportunities for reform. These components include:
- Eligibility of persons who are intended to be targeted recipients for the intended services;
- Delivery method by which the services may be provided;
- Program compliance enabled by statute or other authority;
- Funding sources for those programs;
- Controls to protect against fraudulent activity; and
- Effectiveness of a program to accomplish its articulated goal.
Senate Financial Institutions and Insurance
(Sen. Jeff Longbine, Chair)
On January 10, the Committee heard a presentation by Insurance Commissioner Vicki Schmidt, which included an update on the Insurance Department’s implementation of an improved producer licensing process, the work of the Consumer Assistance Division, including the recovery of $7.6 million for Kansas consumers in 2022, introduction of key staff, and a summary of the department’s legislative agenda that focuses on improving operations, providing clarity for the insurance companies doing business in the state, and protecting Kansans. Committee members asked questions regarding the state of the insurance market, the requirements for continuing education for insurance agents, and any challenges for the department. Commissioner Schmidt noted that cybersecurity for insurers is a concern and that the National Association of Insurance Commissioners is focused on working with insurers on this issue.
House Appropriations Committee
(Rep. Troy Waymaster, Chair)
Senate Ways and Means Committee
(Sen. Rick Billinger, Chair)
On January 12, the Committees held a joint meeting and received reports regarding the human services consensus caseload estimates and consensus revenue estimates for FY 2023 and 2024, and Gov. Kelly’s budget recommendation for FY 2024.
Megan Leopold, Senior Fiscal Analyst, KLRD, reported that the caseload estimates include expenditures for Temporary Assistance for Needy Families, the Reintegration/Foster Care Contracts, KanCare Regular Medical Assistance, and KDADS non-KanCare. For FY 2023, the revised estimate for all human service consensus caseloads is $4.8 billion all funds, including $1.3 billion SGF. This is an all funds increase of $259.5 million, including an SGF decrease of $198.2 million, from the budget approved by the 2022 Legislature.
J.G. Scott, Director, KLRD, reported that the state general fund revenue estimate for FY 2023 is $9.70 billion, an increase of $794.2 million above the previous estimate. The initial estimate for FY 2024 is $10.12 billion. He also described the economic forecast for Kansas, including forecasted rates for nominal growth in the national and Kansas economies, the nominal U.S. gross domestic product (GDP) and nominal Kansas gross state product for calendar years 2023 and 2024 and noted that the estimates will be further adjusted in mid-April prior to the end of the 2023 legislative session.
Budget Director Adam Proffitt talked through a slide presentation of the Governor’s budget recommendation for FY 2024 and responded to questions from the members of the committees. Questions were focused on the use of certificates of indebtedness, debt retirement, the current status of the SPARK process, funding for IT infrastructure, the statutory formula for special education funding, veterans’ homes staffing, the balance in the Rainy Day fund, pay increases for state employees, the addition of prepared foods to the food sales tax exemption, funding for mental health beds in Sedgwick County, and funding for the six Regents institutions.