The state’s three KanCare companies collectively lost nearly $170 million during the first two years of the program, according to a document reviewed by an oversight committee Tuesday.
And the state has still not hired an inspector general to act as a watchdog for the $3 billion KanCare program nearly a year after the last appointee resigned.
The state privatized its Medicaid services in 2013 under the KanCare umbrella. None of the three companies awarded a state contract turned a profit that year or the year after.
Sunflower Health Plan experienced the biggest losses both years, losing $35 million in net income in 2014 and $58 million the year before that.
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United HealthCare came closest to breaking even in 2014 with a net income loss of $1.5 million. That comes after the company lost $27 million the previous year.
Amerigroup lost $16 million administering Medicaid services for the state in 2014, an improvement upon its loss of $31 million the year before.
Meanwhile, the state is having difficulty hiring an inspector general who will accept the annual salary, said Aaron Dunkel, deputy secretary of the Kansas Department of Health and Environment. The agency has made offers to qualified candidates – including two with federal experience – but those offers had been rejected, he said.
The position pays $85,000 annually, according to KDHE.
Former Rep. Phil Hermanson, R-Wichita, was appointed inspector general last April, but resigned in June after questions were raised about his qualifications.
The inspector general investigates and protects against fraud, waste and other misconduct with the state’s privatized Medicaid program. Hermanson had no investigatory or prosecutorial experience and no background in the health care field. Critics who saw his hiring as a political appointment also raised questions about a prior DUI charge.
Hermanson was never confirmed by the Senate and did not perform the duties of the job, but he did receive a state paycheck during his brief tenure. The position has been essentially vacant since Bill Gale left it in January 2014 to take a position as Wichita regional director for the Department for Children and Families.
During the oversight hearing, Rep. Jim Ward, D-Wichita, questioned KDHE’s commitment to filling the position in a timely manner, which he said is vital to ensure accountability of the program.
“I just know that there’s prosecutors out there who would take this job,” he said. “You say you don’t pay enough … but we went from barely competent to now you need a former attorney general.”
Dunkel said the agency was targeting people who have Medicaid experience and inspector general experience.
SB 182 would have taken the position outside the state’s civil service system, which would have given the agency more flexibility to offer a higher salary to a deserving candidate, Dunkel told the committee.
The bill was altered by the Senate Public Health and Welfare Committee to eliminate the inspector general position entirely, but the committee did not vote to send it to the Senate. Dunkel said that while that legislation was pending, the agency had halted its search for a new inspector general.