A judge in Topeka has ruled that Kansas can keep moving forward with new contracts for its privatized Medicaid program while a legal challenge brought by one of its current contractors plays out.
Judge Franklin Theis denied a request for an injunction by Amerigroup, the Virginia-based company that is challenging the fairness of a bidding process that left them out of new contracts worth about $1 billion each annually. The injunction would have prevented the state from moving to implement the new contracts until the legal case is over.
But Laurie Roberts, a PR specialist hired by Amerigroup, said there also were some encouraging developments for the company in court Thursday.
“We’re pleased that the judge agreed to set a hearing for Sept. 5 and 6 where evidence will be shared in court,” Roberts said via email. “Judge Theis also ruled that Amerigroup will be allowed to continue its Medicaid program preparedness work for the upcoming year while the judicial process takes its course. Both of those outcomes are what we had hoped for.”
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A spokesman for the Kansas Department of Administration, which oversees state contracts, said the department wouldn’t comment on pending litigation.
A spokeswoman for the Kansas Department of Health and Environment, which oversees KanCare, said the agency stands by an earlier statement from Medicaid director Jon Hamdorf about the contracting process.
“All bidders were evaluated on the same criteria,” Hamdorf said. “We consistently conveyed the same to all parties throughout the process, which included in-person meetings, phone calls, etc. We look forward to a Jan. 1, 2019 new contract implementation date.”
Amerigroup is one of three managed care companies that have had contracts to administer Kansas Medicaid since 2013, when it was fully privatized and re-branded “KanCare.”
The other companies are Sunflower State Health Plan (a division of Missouri-based Centene) and Minnesota-based UnitedHealthcare.
Sunflower State and UnitedHealthcare were both chosen for the new “KanCare 2.0” contracts earlier this year. But Amerigroup’s bid was declined, in favor of one from Aetna.
Amerigroup currently serves about 120,000 of the 400,000 KanCare recipients. If Amerigroup doesn’t prevail in its legal challenge, those people will have to choose new plans for 2019 when open enrollment starts this fall.
The challenge hinges on changes legislators made to the KanCare program after the new contracts were put up for bid. Amerigroup, represented by at least three law firms, has argued that it should have had the opportunity to change its bid after those changes passed into law.
Medicaid is funded jointly by the federal government and states. In Kansas, the feds pay about 55 percent and the program covers medical care for children, the elderly, pregnant women and some very low-income parents. It covers medical care and daily support services for Kansans with disabilities.