Health Care

Amerigroup to contest decision to give KanCare contract to another company

Then-Gov. Sam Brownback started KanCare, the state's privatized Medicaid program, in 2013.
Then-Gov. Sam Brownback started KanCare, the state's privatized Medicaid program, in 2013.

Amerigroup, one of three insurance companies that has run KanCare since former Gov. Sam Brownback started the privatized Medicaid program in 2013, says it will contest the state's decision to leave it out of new contracts that start next year.

The Kansas Department of Health and Environment announced last week that it awarded contracts for "KanCare 2.0" to two of the current KanCare companies — Sunflower State Health Plan (a division of Centene) and UnitedHealthcare — but will replace Amerigroup with Aetna.

Amerigroup spokeswoman Denise Malecki said by email Monday morning that the company is "disappointed" with the decision and "intends to contest the contract award decision through the state's formal bid process."

"We are committed to working collaboratively with the state to review the process and determine the best approach for moving forward," Malecki said. "In the meantime, we remain focused on our top priority — the Kansans we serve. As we proceed with our protest, we will work diligently to ensure individuals have uninterrupted access to services, and deliver care that helps improve their health and well-being."

Malecki said Amerigroup has provided Kansans on Medicaid "improved access to high-quality health care since 2013" and today serves more than 127,000 KanCare recipients.

An international law firm, Foley & Lardner, filed an open-records request last week on Amerigroup's behalf, seeking information about how the state formed its request for proposal for the contracts.

Jeff Andersen, the secretary of the Kansas Department of Health and Environment, or KDHE, said via email that the agency appreciates Amerigroup's work serving the state's Medicaid recipients, but thinks Aetna, Sunflower State and UnitedHealthcare are the right companies to move KanCare forward.

“We stand by the extensive review process and final selection," Andersen said. "Dozens of experienced and knowledgeable KDHE and KDADS (Kansas Department for Aging and Disability Services) staff reviewed the bids. A 17-member team made the final recommendation, and it was unanimous."

The KanCare contracts are each worth about $1 billion, but most of the money goes to pay health care claims and in the initial years of the program all three contractors lost money.

It wasn't until 2016 that all three turned a profit. Amerigroup made $24.2 million on its KanCare contract in 2015, but that dropped to $3.4 million in 2016.

If the current contract awards stand, all of the 124,357 people currently enrolled in Amerigroup KanCare plans will have to choose new plans for 2019 during the open enrollment period that starts in October.

The shake-up of the contracts next year will also affect hundreds of Amerigroup employees and thousands of medical providers.

When it applied for its first KanCare contract in 2012, Amerigroup said it would need about 220 full-time positions in Kansas to administer it. Malecki said it has more than 300 now.

Amerigroup also has network agreements in place with thousands of health care providers across the state, though fewer than the other KanCare companies. At the end of 2017, Amerigroup had about 27,000 in-network providers, as opposed to about 31,000 for each of the other two companies.