While draconian income tax cuts stand as the most controversial experiment of Kansas Gov. Sam Brownback’s administration, its overhaul of the state’s Medicaid program is not far behind.
Beginning in January 2013, the state began phasing out the traditional fee-for-service model and enrolling low-income, disabled and frail elderly patients in a managed care program called KanCare. The administration contracted with three for-profit health insurers to coordinate care for a patient population that currently numbers about 400,000.
KanCare was launched with promises, some of them written into the contracts with Amerigroup Kansas Inc., United Healthcare Community Plan and Sunflower Health Plan, a subsidiary of Centene.
Medicaid eligibility would not be reduced. Payments to health care providers could not be lowered. Patients would not see cuts in benefits.
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Brownback and his lieutenant governor, Jeff Colyer, also promised that in five years, the state would be able to show at least $1 billion worth of savings.
That was a bold pledge. No other state had attempted privatization of its entire Medicaid program. And where managed care had been tried, the record for improving the quality of care while lowering costs was spotty.
More than a year and a half in, KanCare’s record is mixed.
Consumers in the general patient population, mostly low-income children and mothers, seem relatively satisfied. Few have complained of being denied services. Emergency room visits have dipped and adults can now get preventive dental care, which was unobtainable under the old Medicaid program.
The greatest resistance to KanCare came from families of physically and developmentally disabled patients, who worried about putting managed care companies in charge of support services such as case management and respite care.
Some of those patients have benefited from better coordination of care. Teressa Harvey, of Lawrence, who has a traumatic brain injury, says an Amerigroup caseworker discovered she had languished for years on the wrong waiting list. Disabled and homebound since her teens, Harvey, 64, now uses a computer, reads and has started a small crafts business.
But families of some other patients with traumatic brain injuries said caseworkers for the managed care companies have proposed cuts in assistance, especially overnight care for severely disabled and seizure-prone patients. This has left families angry and fearful.
While families of developmentally disabled patients say they are mostly receiving the same levels of services, there is concern about how long that will last.
Fears of cutbacks aren’t baseless. All three of the managed care companies lost money in 2013, and the shortfalls accelerated in the first half of this year, amounting to $182.6 million total.
The Kansas insurers are being subsidized by deep-pocketed parent companies, but those companies are in the business to make money. Savings could ultimately be achieved by keeping patients healthier and providing smarter care. But cuts in service are a potential route to profits.
It’s also possible the Brownback administration could renegotiate higher rates for the insurers or pick up a portion of the losses. Talks about rate readjustments are in progress, a spokeswoman said.
But those measures would make it harder to achieve the promised $1 billion in savings by 2018.
The other big problem has been late payments of claims submitted by hospitals, nursing homes, doctors, pharmacists and other health care providers. Some have complained bitterly about having to delay paying bills and even making payroll while they’re waiting for reimbursements from the managed care companies.
Sara Belfry, a spokeswoman for the Kansas Department for Health and Environment, said the insurers are paying almost 100 percent of “clean” claims within 30 days. Claims sent over without the required information take longer, she said.
Providers say claims that would have passed muster under the old Medicaid system are now being rejected. The state needs to work out the wrinkles before providers stop taking KanCare patients. The available network is already spread thin in many parts of the state.
The verdict on KanCare is still out, and that may be the case even when the contracts with the three insurers expire at the end of 2015 and renewal options are assessed. But unless the insurers begin to reverse their losses, it’s difficult to fathom how the state can meet its promised savings without harmful cuts in patient care.