A legislative joint oversight hearing this week highlighted how the rollout of KanCare has been rocky, with some improvements and cost savings from the state’s privatization of Medicaid but also payment delays and some service problems. A new report that the private insurance companies lost more than $110 million last year raises additional concerns about the reform.
State officials pointed to some positive results from KanCare’s first year. Shawn Sullivan, secretary of the Kansas Department for Aging and Disability Services, told lawmakers that 3,200, or 27.1 percent, of 12,000 consumers enrolled in physical and developmental disability programs under KanCare experienced service increases during 2013, while 1,300, or 11 percent, experienced involuntary reductions in services.
“As you can see from these numbers, the effect of KanCare overall has been to increase services to these vulnerable consumers,” Sullivan said.
He also said there were 8,061 fewer emergency room visits by individuals served through disability waiver programs, a 27 percent decrease from the period before KanCare.
But service providers complained about slow payments and bureaucratic hassles. Bob Finuf, vice president at Children’s Mercy Hospitals and Clinics, told lawmakers that the hospital’s accounts-receivable balances of more than 90 days increased 130 percent under KanCare in 2013. Via Christi Health and Wesley Medical Center in Wichita have experienced similar payment delays, as have many smaller hospitals.
Also, none of the three managed-care companies reported meeting the state’s performance standards for timely processing of payments, said Kari Bruffett, director of health care finance at the Kansas Department of Health and Environment.
And though some clients were pleased with the services they received through KanCare, others complained about service cuts and being lost in the system.
A new report submitted by state officials to the federal Centers for Medicare and Medicaid Services suggests that the three insurance companies had collective net operating losses in excess of $110 million last year. If those losses continue, will the companies become even worse at paying and authorizing claims?
And while KanCare appears to have slowed the rate of growth of Medicaid costs this fiscal year, new caseload estimates for next fiscal year forecast an increase in costs of 9.2 percent. That could be difficult for the state budget to absorb, particularly when state revenues have dropped sharply due to tax cuts.
It’s not surprising that KanCare had problems in its first year of operation, given the magnitude and complexity of the reform. And there are indications that some of the early problems are improving. But there are still reasons to worry.