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Lawmakers and providers assess KanCare transition

Problems and frustrations aplenty, but change to expanded managed care smoother so far than many expected

By Mike Shields | January 28, 2013

There have been plenty of problems and frustrations. No one denies it.

But as Gov. Sam Brownback’s Medicaid makeover entered its fourth week, administration officials, some legislators and a variety of others involved with KanCare said they thought the massive changes underway in the $3.2 billion program so far have gone smoother than many expected.

KanCare, which launched Jan. 1, moved virtually all the state’s 380,000 Medicaid enrollees into health plans run by three of the nation’s largest managed-care companies: United HealthCare, Amerigroup and Sunflower State Health Plan, a subsidiary of Centene.

'Growing pains'

“I think we’re in the growing-pains phase,” said Mike Larkin, executive director of the Kansas Pharmacists Association, which months ago began preparing its members for the changes. “Some of our members are getting different answers on things, depending on who they call.”

Because people tend to see their pharmacists more often than other medical providers, pharmacies were among the first to file claims and otherwise deal directly with the new system.

Larkin said he expected to be “inundated” with calls from members dealing with KanCare problems the first week of January.

“I was pleasantly surprised that I wasn’t,” he said. “I think we were more prepared than maybe some other folks for the things that are coming down. There are some stipulations of the contract that the state signed with the MCOs (managed care organizations) that we’re still waiting to see fruition on…but as far as the pharmacies go, there are some frustrations but for the most part, I suppose it could be worse.

“I’m looking at mid-February. I was talking with a legislator and we agreed that if Feb. 15 comes and some things haven’t settled down, then we’ve probably got a problem,” Larkin said.

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State officials anticipated there would be difficulties during the transition and took some steps to ease them.

First 90 days

For the first 90 days of KanCare — and in some instances longer — the state is requiring the insurance companies to comply with previously established "plans of care" for Medicaid clients in order to minimize disruptions to the patient's usual or expected services.

Also for the first 90 days, the state is requiring the companies to reimburse Medicaid services given by any medical provider regardless whether the provider has signed a contract joining the companies' service networks.

As the program's launch date approached, state and MCO officials began holding daily 9 a.m. teleconferences with Medicaid providers and beneficiaries to help troubleshoot problems as they arose.

State and insurance company officials answer questions from callers, make note of problems and sometimes post them to their respective online “issues logs," though state officials concede many problems marked "resolved" on the the logs have simply been brought to the attention of someone to work on, rather than fixed.

The most frequent, single response to callers during the daily calls has been “can we get back to you on that?” or words to that affect. But many callers also seem to go away satisfied with the answers they get.

“They’re trying”

One of those who called in recently was Vicki DeStefano of Fairway. She telephoned on behalf of her 53-year-old brother, Mike, who receives Medicaid-funded assistance after suffering a serious brain injury in a 2006 motorcycle accident that left him mostly unable to move or speak and eating through a tube.

He needs attention around the clock, she told KHI News Service in a later telephone interview, and before November there were six people being paid, not including her, to help care for him at different times of the day or week.

Now there is only one person to help her with her brother. The others left because they stopped getting paid. DeStefano said she is paying the remaining person out of her own pocket because some things she simply cannot do by herself.

She said the agency that handled the payments to the workers told her they weren’t getting reimbursed by the managed care companies. But DeStefano said she was more upset with the intermediary Financial Management Services (FMS) agency (commonly referred to as a “payroll agent”) than she was with United HealthCare, because the company seemed to be trying harder to help her and her brother.

She said her prior experiences with state officials and a succession of its contracting payroll agents had left her exhausted, frustrated and ready for any kind of change in the system.

“We really needed a change,” she said. “Whenever you have the government doing something, it’s a mess. I think we need a change, I just don’t think they did the research to make it go right…The state just dumped it on to all these MCOs and didn’t do anything to help them.”

DeStefano said she was alarmed by how unprepared many of the MCO employees seemed to be, but she said she expected things would only get better. She said she was impressed that the day after she called in to complain about her problems, a United representative called on her to see about fixing them.

Her problems weren’t resolved yet, she said, “but even when they can’t resolve it right away, they’re trying.”

She said she never got quick responses from the state, so the new attention from the MCO was welcome.

“Extremely pleased”

Cathy Harding is executive director of the Kansas Association for the Medically Underserved, which represents the state’s safety-net clinics. She also said she was pleased by the responsiveness of the MCOs.

“I think most people expected it wouldn’t be possible to implement a huge program like this without bumps in the road,” Harding said. “The thing I was concerned with (going in) was how responsive would the MCOs be when we bring them problems. In that regard, we have been extremely pleased. All three MCOs, when we bring things to their attention they have literally jumped right on it.”

Harding said there were ongoing transitional problems but that she expected things could be running smoothly within three months.

“This is a guess on my part,” she said, “but given how things are working at this point in terms of addressing issues, I’d be a little surprised if we don’t have all these kinks worked out in three months. Three months for a program of this size is certainly not bad. We’ll see.”<a name="continued"></a>

Slow payments

Among the frequent complaints or questions from Medicaid providers during the state’s daily teleconferences have been those about claims rejections or delays in payment from the MCOs.

Bill Craig, is chief executive of Lake Mary Center in Paola. It is a licensed, psychiatric residential treatment facility specializing in severely developmentally disabled children.

Craig said it was too soon to give a fair, overall assessment of KanCare. But he said it wasn’t too soon for him to have cash-flow problems because of stalled payments.

Joe, age 9, looks into the camera during lunch at Lake Mary Center school. Seated with him are paraprofessional Jayla Ellis and Javier, age 10.

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“Two of the three companies are really screwed up,” he said. “One of the companies is paying like clockwork and the other two are not. It’s not as if they’re being difficult with us. It’s clearly incompetence on their part. We’re about $100,000 behind as of today (Friday). If there isn’t some corrective to that, we’ll be borrowing from the bank next week to be sure we can make payroll. We anticipated this, and it’s happening. The bank’s happy about it because we’re paying interest to them. It’s not a problem for them. But there’s a limit to how much we can get.”

Officials at the Kansas Department of Health and Environment told KHI News Service that as of Sunday, the three insurance companies had paid a total of $33.6 million in claims since Jan. 1. The state also has paid out about $117.5 million in January for previous, pre-KanCare claims.

• Amerigroup had paid $11.8 million as of Jan. 26

• Sunflower had paid $10.4 million as of Jan. 25

• United Healthcare had paid $11.4 million through Jan. 27

Historically, the state has paid out an average of about $205 million a month for the services now channeled through the MCOs, so the payments from the companies and state to date for January apparently are running significantly below that average. But the picture is far from clear at this point and state officials said they would have more complete information for comparing January to previous months by the end of the week.

It also is possible, given the state of the transition, that millions of dollars more in payouts could occur this week. But in some other states that have recently moved to expanded managed care, the issue of stalled payments did not soon go away and created significant problems for providers and heated political backlash.

Kari Bruffett, director of the health care finance division at KDHE said the state and the MCOs were working to respond quickly to problems with payments.

"And we have our contractual obligations (with the MCOs) for prompt payments and there's no let up on that during the transition period," she said.

Can Kansas learn from Kentucky? Kentucky state auditor says Kansas should avoid the managed care mistakes of the Bluegrass State

State officials declined to make public the number or value of claims filed to date under KanCare versus the amount paid by the MCOs.

“With the constant input of information under KanCare, to provide the most useful information (and for reporting a clear, understandable picture) we are looking forward to providing you a report when the monthly cycle has completed,” said Miranda Steele, a KDHE spokesperson.

During the daily teleconferences, MCO officials have given a variety of explanations for delayed payments ranging from provider miscoding of claims to misunderstandings with MCO subcontractors and pending paperwork on provider/MCO contracts. The explanations all could fall under a broad category called temporary transition problems.

Too little time for scrutiny

Craig said he also was waiting to see how the MCOs would handle referrals to Lake Mary and similar facilities. Though Lake Mary is licensed for 85 children, “today we have 52.”

Craig said policy changes earlier in the Brownback administration tightened admissions to the so-called PRTFs so that the numbers dropped “kind of overnight without an increase in capacity in community services” to otherwise care for the children.

Craig said he remains an opponent of including long-term support services for the developmentally disabled in KanCare. Last year, the Legislature postponed including those services until Jan. 1, 2014. He said he was concerned that by the time it is known whether the KanCare problems are temporary, transitional issues or longer lasting and systemic, the Legislature will have concluded its 2013 session.

“This issue here is that the Legislature will be gone in a few months,” he said, “even assuming they would have the capacity to look at anything independently in time to give a good read on KanCare and the administration has made clear its intention to include developmental disability services in 2014. So, the period for possible scrutiny and conversation will be gone before there is good information.”

For some legislators, at least, KanCare already looks like a success.

Members of the House and Senate health committees met in joint session last week to hear about KanCare’s progress from administration and MCO officials.

They were spared some of the frustrated criticisms of the program that surfaced earlier in the week during the daily, troubleshooting teleconferences. There was little time for questions and few were asked.

Lt. Gov. Jeff Colyer and other officials also talked about KanCare with the Senate Ways and Means Committee but were spared any tough questions, perhaps because Colyer reported that the state already had saved $18 million thanks to KanCare and would not be asking for additional funding for Medicaid programs, which historically have gone up one year to the next.

Sen. Jim Denning, R-Overland Park.

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Pleased legislators

Sen. Jim Denning, an Overland Park Republican, was effusive in his praise of the program and its implementation and took several minutes to express his admiration.

“I think you did a great rollout,” he said. “I think you just did a fantastic job. You have to take your hat off to the state of Kansas. I know the MCOs are cutting almost advance payments…in the state of Kansas, they’ve really stepped up and done a remarkable job.”

Denning said he knew “there would be some bumps in the road…the tail is wagging the dog now…but there’s so much oversight and interest in KanCare to do exactly what we’ve been talking about: better patient care at lower cost.”

Sen. Jeff Melcher, a Leawood Republican, also said he was pleased.

“It seems like what we have taken on here is a BHAG, a big, hairy, audacious goal,” he said. “I would encourage us to continue to take these things on and we will surprise ourselves. If we take on big, hairy, audacious things, we will accomplish things we’ve never tried in the past.”

Optimistic projections?

Brownback officials have forecast $1 billion in savings to the state and federal government from KanCare over the next five years and predict there will be better results for patients because of a new emphasis on coordinated care.

However, a recent study found no evidence that managed care initiatives across the country were succeeding to the extent that policy makers had hoped in holding down Medicaid costs and improving services.

Michael Sparer, the Columbia University professor of health policy and management who conducted the study for the Robert Wood Johnson Foundation, said the Brownback administration’s cost-saving estimates might not be realistic.

“I can’t say they’re wrong at this point, but I can certainly say that I’m skeptical of their rather optimistic projections,” Sparer said.

KHI News Service coverage of KanCare

Hutchinson Clinic's letter throws a curve to KanCare open enrollment (1/28/14)
National Disability Council again urges CMS to hold off on Kansas DD carve-in (1/14/14)
DD carve-in not approved for Jan. 1 launch (12/27/13)
National Council on Disability urges one-year delay of KanCare DD carve-in (12/13/13)
KDADS chief describes lessons learned with KanCare (12/5/13)
Other states watching Kansas as it implements ‘unprecedented’ Medicaid model (12/5/13)
KanCare reimbursement problems continue for providers (11/25/13)
Kansas dental program for children on hold because of KanCare MCO (11/11/13)
Kansas Medicaid providers complain to oversight committee (10/7/13)
Wichita hospital execs describe problems with KanCare (8/29/13)
KanCare to adopt “health home” model for treating mentally ill (7/22/13)
Kentucky’s rush into Medicaid managed care: A cautionary tale for other states (7/18/13)
DD groups largely reconciled to KanCare carve-in (7/15/13)
Advocates urge more government oversight of Medicaid managed care (7/8/13)
Independent pharmacists push for KanCare contract enforcement (7/1/13)
Payroll agents for the disabled on Medicaid say they are struggling under KanCare (6/3/13)
Personal Care Attendants: KanCare's unheralded workers (5/20/13)
House GOP leaders pen letter backing DD supports in KanCare (5/17/13)
More than 1,000 rally at Statehouse for DD carve-out (5/8/13)
Nothing to be done about coverage gap in states not expanding Medicaid, feds say (4/29/13)
As KanCare continuity of care period ends, problems persist; legislators starting to hear about it (4/8/13)
Advocates raise concerns over possible reductions in KanCare services (3/28/13)
Conferees agree on KanCare oversight committee (3/28/13)
DD advocates push to extend KanCare "carve-out" (3/20/13)
Safety-net clinics struggling with KanCare (3/4/13)
Major medical provider groups ask for longer KanCare transition (2/13/13)
Lawmakers and providers assess KanCare transition (1/28/13)
Five-part series: "Lower cost and better care: Can KanCare deliver?" (1/14/13)
Independence of KanCare ombudsman questioned (1/7/13)
KanCare special terms and conditions spelled out by CMS in a document (12/28/12)
KanCare workforce shift hampering local agencies (12/10/12)
Governor announces KanCare approval by feds (12/7/12)
More KanCare implementation details outlined (12/3/12)
Federal officials say they hope to act soon on KanCare waiver request (11/28/12)
New KanCare info included on state website (11/20/12)
Groups call for KanCare delay (11/8/12)
Go/no-go date looms this week for KanCare (10/15/12)
KanCare benefit packages outlined (9/26/12)
Provider groups nervous about lack of KanCare details (9/13/12)
KanCare Confidential (9/10/12)
KanCare contracts awarded (6/27/12)
KanCare plan panned again at public hearing (6/20/12)
Wichita KanCare forum draws more than 200 (6/19/12)
Medicaid makeover: Can Kansas learn from Kentucky? (6/11/12)
Hundreds protest inclusion of disability services in KanCare (4/25/12)
Counties weighing in on KanCare (4/9/12)
Hospital administrator to chair KanCare Advisory Council (3/29/12)
Brownback Medicaid makeover an “ambitious” plan (3/28/12)
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)
Kansas Medicaid makeover in the works (3/7/11)

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