Thousands of Kansas medical providers will see increased reimbursements for Kansas Medicaid, or KanCare, after Gov. Sam Brownback signed a bill Thursday to restore a 4 percent cut imposed in May 2016 amid persistent budget crises.
The increase will begin July 1. Gordon Docking, who runs KidsTLC, a residential treatment facility in Olathe for kids with mental health problems, said he’s eager to have it.
“For us, if you take away charitable dollars we raised through philanthropy, Medicaid is probably 90 to 92 percent of our total revenue,” Docking said. “So the 4 percent cut for us is extremely, extremely harmful.”
There are more than 400,000 people on KanCare, and the restoration of the cuts will infuse cash into almost every Medicaid provider in the state. But it’s particularly a boon for those who work with children.
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It’s much easier for children to qualify for Medicaid based on income, and according to the American Academy of Pediatrics, almost 64 percent of the people on KanCare are kids. Most of the adults in KanCare are either disabled, pregnant, or frail and elderly.
Jon Rosell, the executive director of the Kansas Medical Society, said that the restoration of the 4 percent cut would be especially good news for pediatricians and obstetrician/gynecologists.
“It would certainly impact their bottom line more dramatically than others,” Rosell said.
The Brownback administration imposed the 4 percent cut last year to save about $56 million and help patch a state budget hole.
Some providers said they couldn’t sustain the cut very long and the governor and legislators went into the 2017 session looking for ways to restore the money.
“Everybody was working so hard to make sure that happened,” said Rep. Dan Hawkins, a Republican from Wichita who chairs the House Health and Human Services Committee.
They settled on an increase in the fees charged to health insurers who operate health maintenance organization, or HMO, plans. The tax will mainly affect the three private companies that administer KanCare, but the state is expecting to use increased federal reimbursements to pay them back.
The Legislature also passed a tax increase to try to ward off future budget imbalances, and then overrode Brownback when he vetoed it.
Rosell said the Legislature deserved credit, but so did physicians who kept taking Medicaid patients as reimbursements slipped.
“It posed a financial challenge to many practices across the state,” Rosell said. “So hats off to those physician practices that remained committed to their patients participating in KanCare.”
Given his payer mix, getting out of KanCare altogether was not an option for Docking.
His facility is one of nine psychiatric residential treatment facilities in Kansas that provide out-of-home placement options for kids who have a mental health diagnosis, substance use diagnosis, sexual abuse disorders, developmental disabilities or some combination of them. The others in the Kansas City area are KVC Prairie Ridge in Kansas City, Kan., and the Merillac Center for Children in Overland Park.
Wichita’s only two psychiatric residential treatment facilities closed in the last three years.
Docking estimated that the 4 percent cut had cost KidsTLC between $400,000 and $450,000 over the course of a year, on a budget of about $12.5 million, according to its most recent available tax filing.
“For an organization like us to lose that much cash flow, it limits your ability to maybe expand a program or consider a new service because you’re just getting a little bit of a bunker mentality and just trying to get through week by week,” Docking said.
His organization employs therapists, counselors, nurses, case managers and other health professionals. It has 61 licensed beds in its main facility and another 12 in a program for kids transitioning back into the community. Docking said the beds are usually full, and there’s a wait list to get in.
He said getting the 4 percent back from the state would make it “a little bit easier to make payroll.” His attention now turns to Congress, where Republicans in the U.S. House of Representatives have proposed new limits on federal Medicaid spending that are estimated to take about $800 billion out of the program nationwide.
“If they somehow dramatically reduce the money in the Medicaid pot at the federal level that could have a downstream effect on us,” Docking said.