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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

Adult care facilities wary of KanCare reimbursement change

State hopes to smooth payment issues by recalculating rates twice a year

By Andy Marso | November 17, 2015

Groups that represent Kansas adult care facilities say a change to their Medicaid reimbursement calculations is not ideal, but they’ll accept it if it resolves payment issues caused by the state’s switch to privatized managed care.

Rhonda Boose, an official with the Kansas Department for Aging and Disability Services, brought the changes to a legislative committee on rules and regulations for review this week.

Photo by Andy Marso Rhonda Boose, an official with the Kansas Department for Aging and Disability Services, explains a proposal to change Medicaid reimbursement rates for adult care facilities in Kansas. The change would mean rates are recalculated twice a year rather than four times.

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The changes modify how adult care facilities are reimbursed for care for Medicaid-eligible residents. The facilities receive different rates depending on the medical needs of the residents with Medicaid, which in Kansas is called KanCare.

The state currently recalculates those rates four times a year to adjust for changes in each facility’s population. The proposed regulation would trim that to twice a year, which Boose said could reduce overhead costs.

“It is anticipated the changes will allow for a more streamlined rate-setting process, making the overall KanCare rate-setting procedure more efficient, accurate and less burdensome,” Boose said. “Any savings or additional costs will be borne by KDADS. There will be no additional costs to Medicaid recipients or other government agencies.”

Sen. Vicki Schmidt, a Republican from Topeka, asked Boose if the agency discussed the changes with adult care facility administrators.

Boose said organizations like LeadingAge Kansas, which represents nonprofit adult care facilities, and the Kansas Health Care Association (KHCA), which represents for-profit facilities, were involved in the discussion from the beginning.

“And do they have any angst over going to twice a year instead of four times a year?” Schmidt asked.

“No, because it really will not impact their reimbursement rate,” Boose said. “It’s to streamline the process. But by going to this, they should see some reduction in administrative costs, is what we’ve heard from them — that by not having to adjust their rates quarterly and their billing quarterly they should see some administrative savings.”

After Monday’s legislative meeting, officials with LeadingAge Kansas and KHCA said that’s not an accurate summary of their reactions to the change — or their involvement in the process.

Cindy Luxem, president and CEO of KHCA, said she had discussed the proposal with KDADS Secretary Kari Bruffett but had no conversations about it with Boose.

Luxem said some KHCA members she has surveyed are in favor of the change, but only because they hope it will lead to fewer billing problems with the three private insurance companies that took over Kansas Medicaid when it became KanCare in 2013.

“The managed care companies have not been able to pay correctly basically ever since managed care started, because they cannot figure out how to do these quarterly adjustments,” Luxem said. “But I do have some members, quite honestly, that are not real pleased with it.”

Debra Zehr, president and CEO of LeadingAge Kansas, called the proposed change “not a home run, great solution.”

Zehr said her members welcome efforts to reduce the administrative burden of KanCare, but a better solution would be to fix the deficiencies in the quarterly rate changes.

“Instead of streamlining or correcting issues in the way and length of time it took to make those quarterly adjustments, their solution was to simply not do it as frequently,” she said.

The billing problems that her members face date to the earliest days of KanCare, Zehr said.

Medicaid is public health insurance coverage jointly funded by the state and federal government. It serves about 425,000 Kansans — mostly low-income children, their parents, pregnant women and people with disabilities. It also fills gaps in Medicare coverage for low-income, elderly Kansans.

Some Kansas Medicaid populations were under managed care prior to 2013, but national experts said the switch to KanCare was unprecedented in scope and speed.

Zehr said the private insurance companies’ struggle to maintain the quarterly rate changes was not foreseen.

She and Luxem said that if the state moves to twice-annual rate changes, their members risk taking a financial hit if their patient mix changes and they’re forced to care for costlier patients between rate adjustments.

Luxem said she’s waiting until a Dec. 15 public hearing to decide whether KHCA will formally back the change.

“I have not come to the total conclusion that we as an association will support it 100 percent,” she said. “Even though we have expressed to the secretary of aging and disability services that we plan to support it at this time, since I told her that I’ve had a couple members tell us they do not want us to support it.”