Kansas House passes budget requiring KDHE not to alter Medicaid for the next year
The Kansas House advanced legislation Wednesday requiring the state health department to effectively freeze operation of its Medicaid program and refrain from renegotiating $4 billion in contracts that are up for renewal as a condition of receiving funding in next year’s budget.
The House voted 73-39 to approve next year’s state budget with a provision barring KDHE from renegotiating contracts with private insurance companies that administer the state’s Medicaid program. Any changes would have to be approved by Legislative leaders for the next year.
The proposal was originally brought to the Kansas House as a standalone bill. But lawmakers opted last week to insert it into the budget, a maneuver often used when a proposal cannot gain sufficient votes for passage standing alone.
Rep. Brenda Landwehr, a Wichita Republican, said the goal of the policy is to ensure the renegotiation is conducted by a single gubernatorial administration. Gov. Laura Kelly, a Democrat, is up for reelection in November. If she loses, control over the contracts would almost certainly go to her presumptive Republican opponent, Kansas Attorney General Derek Schmidt.
Current contractors, Landwehr said, have been good for the state.
“We want to make sure that the administration in January is the same one that makes the decision of what is that RFP,” Landwehr said during committee discussion.
The Kelly administration is preparing to put out a request for proposals for new contracts as the existing contracts are set to expire next year.
But the state’s Medicaid Director Sarah Fertig has warned that the policy could push the state out of compliance with federal regulations and risk losing millions in funding. Furthermore, she has said, the agency would struggle to perform day-to-day tasks, such as authorization of new treatments, needed to effectively administer Medicaid.
“KanCare is operating very smoothly now. Our concern is that this would break what is not broken,” Fertig said.
In a statement Tuesday, KDHE said it had “grave concerns” about the impact of the measure and that it risked undermining KanCare’s competitive contracting process.
Ahead of the House debate Tuesday Democratic Gov. Laura Kelly took the rare step of speaking directly to Democratic House members, urging them to fight the budget provision and other policies she opposed.
Speaking to reporters afterward, Kelly declined to say whether she’d use her line-item veto power on the provision but called the move political and a poor financial decision.
“This is absurd,” Kelly said. “It’s time to review those contracts, time to put them out for bid. This is supposed to be a free market.”
“The whole thing is political, you know. They want to tie my hands around Medicaid … hoping against hope that I won’t be here next year.”
Last month Democratic lawmakers asked Schmidt for an opinion on the legality of the action.
Schmidt has not yet responded. In an email Monday his spokesman said the office had received the request and that it was pending.
“At worst this is outright illegal,” Rep. Kathy Wolfe Moore, a Kansas City Democrat, said in committee discussion last week. “This is an egregious violation of what we should be doing as a legislature.”
The budget measure was not included in the Senate’s budget but the Senate could choose to accept the provision when the chambers convene for conference committee next week.
This story was originally published March 23, 2022 at 12:34 PM.
