Health Care

October 11, 2012

Kansas providers unsure of Medicaid replacement

For many providers that accept Medicaid, the new privatized program that will manage health care services for the state’s poor and disabled citizens is full of uncertainty.

For many providers that accept Medicaid, the new privatized program that will manage health care services for the state’s poor and disabled citizens is full of uncertainty.

Pending various approvals, KanCare will “go live” on Jan.1, 2013, replacing the state’s current Medicaid system.

But the state is still waiting on federal approval of the program. At this time, there is no indication the state will not obtain federal approval from the Department of Health and Human Services by the Jan. 1, 2013, implementation, according to an official at the Kansas Department of Health and Environment.Under the new system, state Medicaid recipients will be assigned to one of three corporate providers, called managed care organizations. Amerigroup, UnitedHealth Care and Sunflower State Health Plan, a subsidiary of Centene, are all Fortune 500 companies with headquarters in other states.

State officials said they expect Medicaid participants will start to receive enrollment packets for the new system sometime in November.

Managed care is a growing trend throughout the U.S. All states except three enroll Medicaid beneficiaries in some kind of managed care program, according to a Kaiser Family Foundation 2011 survey.

Kansas already uses two managed care companies, UniCare and Coventry, for HealthWave, which provides low-cost insurance for uninsured children and qualifying parents, according to the KDHE.

Nearly all of Kansas’ 380,000 Medicaid recipients will be placed under the three managed care organizations under KanCare. The Brownback administration has said the new program will not cut benefits, limit enrollment or lower provider compensation rates – but will save the state $1 billion over the next five years.

Alex Melugin, an administrator for Phoenix Home Care, is concerned that many patients will lose their targeted case managers, who work to make sure people are signed up and authorized to use Medicaid under the new plan. The three companies will now be in charge of those tasks, and Melugin said it’s unclear how helpful the companies will be if they don’t have any incentive to get people signed up.

Although Melugin said his company’s reimbursement amounts will stay the same for now, he said that the word from providers in other states is that some managed care organizations reduce the number of approved hours to be spent with patients if the company thinks those extra hours are unnecessary, and that could mean less revenue for the providers.

“One of our concerns is if what happened in other states happens here, but I don’t think it will happen overnight,” Melugin said. “We are afraid they will cut approved hours down.”

So far, Melugin said he thinks communication with the managed care companies has been consistent and that they have been responsive to questions.

But providers such as Brett Kappelmann, who owns Cooper Drug in Augusta, remain anxious about how things will play out.

“There’s definitely some hesitation on my part, mainly because I hear this has hurt others in states going to managed care for the Medicaid program. Texas had multiple independent pharmacies close,” Kappelmann said. “It makes me a little nervous we’re putting these plans in the hands of a third party that also stands to profit from this.”

News reports earlier this year cited instances in Texas where Medicaid reimbursements to some independent pharmacists were slashed so low they couldn’t continue to operate. Access for those in rural areas is also a concern, Kappelmann said.

Many independent pharmacists operate in small communities and sometimes serve entire counties, or even multiple counties.

“If doors start being closed – I’m talking worst-case scenario – access will be a problem, especially in rural parts of Kansas,” he said.

“None of us know where the program is going to lead us,” said Jay Stehley, owner of Interim Health Care of Wichita Inc., which offers a variety of home health services.

Stehley said his business doesn’t foresee any immediate financial impact from the change to private, managed care operations, and he notes that his business is diversified beyond just Medicaid reimbursements.

But “six to nine months into the program, we’ll have a better idea of where we stand,” he said.

The company is in the middle of finalizing contracts with the three managed care organizations, which is going well, he said.

“I’ve been told by providers that nothing will change for a period of one year, he said. “That’s really all I’m prepared to say, or even know, at this point.”

Contributing: Associated Press

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