The state has determined that the new Kansas privatized Medicaid program is on track to “go live” on Jan. 1.
“The State of Kansas will go forward with activities to ensure our readiness as we continue to work towards a January 1 start date,” Lt. Gov. Jeff Colyer said in a statement released from the governor’s office late Friday afternoon.
Gov. Sam Brownback’s office released a statement that the state will begin implementing an algorithm on Wednesday that automatically assigns Medicaid recipients to one of three managed care companies. Enrollment packets are scheduled to be sent out in November, and recipients will have a chance to change companies after they have been assigned up until 45 days after the program goes live.
Pending state and federal approval, KanCare will start Jan. 1, 2013, replacing the state’s current Medicaid system by having three Fortune 500 companies – Amerigroup, UnitedHealth Care and Sunflower State Health Plan, a subsidiary of Centene – manage Kansas’ 380,000 Medicaid beneficiaries.
Representatives of the governor’s office met with federal officials in Baltimore this week to discuss federal approval for the new program. The changes by the state require federal approval.
“We had productive conversations with our partners at CMS in Baltimore and look forward to continuing to work with them to ensure KanCare is a success,” Colyer said in a statement.
State officials have tried to reassure legislators that Medicaid recipients will not have services interrupted if the program is delayed.
The three companies slated to manage the state’s new Medicaid program had a deadline of Oct. 12 to have 90 percent of their provider networks in place. But KDHE officials declined earlier this week to say whether the companies had met the deadline.
Officials did not return calls for comment on Friday.
The current Medicaid program – which provides health care services for the state’s poor and disabled – runs on about $2.9 billion per year. State officials say they think the new program will allow cuts in cost without cuts to services.
“We saw there were limitations in the state’s ability to (manage it),” said Kari Bruffett, KDHE division director for health care finance, in a recent interview. “Kansas Medicaid evolved in separate silos, so bringing in companies that have experience with an integrated model was important to us.”
The companies will be paid a monthly per-member rate based on the number of members they have enrolled in each plan, Bruffett said.
They will have 3 percent of their state reimbursement withheld until the end of 2013, which will work as an incentive to meet performance measures based on things like prompt claims processing for network providers.
Withholdings will increase to 5 percent in the second year and beyond, but the measures will be tied to member outcomes as well for things like immunizations, screenings, services and long-term care.
“That’s one of the ways to keep MCOs accountable,” Bruffett said. “We’re withholding those funds until they reach some of those outcomes.”
The state’s initial contracts with the companies are for three years, with two one-year extensions built in, Bruffett said. The contracts say that if the program does not receive federal approval, they are voided and the state will not be held liable for money lost by the companies to implement the program.
Two of the three managed care companies the state is working with announced this week that they are terminating contracts with other states because of financial losses.
Kentucky Spirit Health Plan, a subsidiary of Centene, said it will terminate its contract as a provider for Kentucky’s Medicaid program after one year. Centene currently operates as a managed care organization in 19 states.
Meanwhile, UnitedHealth Care announced it will drop its contract for BadgerCare Plus, Wisconsin’s Medicaid program, because it said the state isn’t paying enough to cover claims.
Contributing: Associated Press