After leading the effort to privatize Medicaid in Kansas five years ago, Gov. Jeff Colyer is fighting to protect his KanCare legacy.
Colyer counts KanCare among his signature achievements as lieutenant governor. But the program — and Colyer’s management of it — is under attack from Democrats and from his Republican primary opponents, who call it a disaster.
The program may radically change, or go away, depending on who wins the governor’s race. Major changes would affect how more than 400,000 people in Kansas receive help from the federal program that provides heath care for children, the elderly and people with disabilities.
Amid promises to transform Medicaid and improve patient health while controlling costs, Kansas launched KanCare in 2013 and charged three insurance companies with managing the care of hundreds of thousands of enrollees.
Colyer and other program supporters say the change has saved at least $1.7 billion — though that figure is disputed — and that access to preventative care has improved. Patient advocates remain unsatisfied and point to a number of problems since the launch.
Data collection problems have kept state auditors from conducting a sweeping evaluation of whether KanCare has worked, but the program has experienced problems acknowledged by everyone.
KanCare struggled for months with a backlog of unprocessed applications that made it difficult for some to get enrolled in the program. A contractor helping process applications fell short of a June 1 deadline to improve its performance.
At one point, the federal government denied a request to extend the program, saying it risked the health and safety of enrollees because of insufficient oversight.
Democrats as well as Colyer’s Republican opponents are highlighting those problems on the campaign trail ahead of primary elections on Aug. 7.
“An excellent example of a disaster in Kansas is our KanCare program, the Medicaid program. It’s so poorly managed that it nearly got shut down by the federal government,” said Republican Insurance Commissioner Ken Selzer.
Kansas’s Medicaid program is performing better than other states, Colyer said. He also said he has taken steps to improve the program. His campaign highlights metrics that it says shows patients are receiving better access to preventative care.
“What we’re doing is we’re dealing with problems,” Colyer said. “Is it perfect? No. Are we getting better? Yes.”
Savings from KanCare disputed
Colyer said KanCare has saved $2 billion over its lifespan. The figure is based on a 2017 report by Leavitt Partners, a health care consulting firm, that total Medicaid spending in Kansas was about $1.7 billion less than projections between 2013 and 2016.
Former state senator Jim Barnett, who is running against Colyer in the Republican primary, disputes the savings figures. He contends the cost projections are unrealistic and inflated.
“That would be like me saying that I went fishing in my farm pond and caught a 40-pound bullhead. That is quite a whopper,” Barnett said.
Comparing Kansas Medicaid spending to other states is a better way to examine costs, he said.
Total Medicaid spending in Kansas rose about 23 percent in Kansas between 2012 and 2016, according to Kaiser Family Foundation data. That’s a larger jump than several neighboring states.
Missouri spending rose by 13.5 percent; Oklahoma by just 3.7 percent. Nebraska’s spending increased 16.5 percent.
Colyer spokesman Kendall Marr said the increase in the number of enrollees drove the spending increase in Kansas. Medicaid enrollment went from 383,000 in 2012 to nearly 430,000 in 2017.
Marr said the administration has never claimed to reduce costs, just that it was going to reduce the rate of cost increases.
“We have consistently prioritized care, not costs,” Marr said.
KanCare has led to a 23 percent reduction in in-patient hospital stays, a 24 percent increase in members using a primary care physician and a 10 percent increase in outpatient, non-emergency treatment, Marr said. Per-person spending also fell from $625 per month in 2013 to $563 per month in 2016, he said.
State auditors tried to assess whether KanCare had improved health outcomes for participants, but found that data about the program was so incomplete they couldn’t make an overall judgment. Data reliability issues prevented auditors from evaluating seven major Medicaid services. Auditors uncovered significant errors in several datasets, their report said.
Auditors did find that KanCare increased the use of three preventative services: primary care, behavioral health and dental services. The use of primary care services has increased 45 percent since KanCare’s launch, for example.
But auditors also found that nursing home use increased 16 percent after KanCare’s implementation, which they wrote “is clearly inconsistent with KanCare’s goal to reduce Medicaid costs for the elderly through increased care coordination.”
KanCare had little to no effect on inpatient care, which auditors said implied the program’s emphasis on preventative care wasn’t reducing the time enrollees spend in hospitals.
Auditors said they were unable to evaluate the home and community based services provided to people with disabilities and the elderly because of changes in billing practices.
“The part that really seems to be a problem is the services to disabilities, long-term supports. And that’s where I hear most of the criticism,” said Sheldon Weisgrau, director of the Health Reform Resource Project in Topeka.
More than 75 percent of the Kansas Medical Society members surveyed said KanCare was not meeting its goals, according to a 2016 Leavitt Partners report. The consulting firm found that in general, doctors interviewed did not believe that moving to KanCare led to improvements in the quality of care for Medicaid recipients.
The federal Centers for Medicare and Medicaid Services denied a request in the last days of President Barack Obama’s administration in January 2017 to reauthorize KanCare. The agency said the program was “substantively out of compliance” with laws and regulations and that the state’s failure to provide effective oversight put the lives of enrollees at risk.
Officials in then-Gov. Sam Brownback’s administration dismissed the findings, charging they were politically motivated. CMS, under President Donald Trump’s administration, eventually granted an extension.
KanCare’s future and the next governor
The future of KanCare may depend on who is elected governor.
If Colyer remains in office, his administration will likely move forward with work requirements for Medicaid.
Trump’s CMS has expressed an openness to imposing work requirements on Medicaid recipients, and Colyer wants to include work requirements on able-bodied recipients in the next version of KanCare.
A federal judge recently blocked a Kentucky plan to impose work requirements, calling it “arbitrary and capricious.” But Colyer doesn’t appear discouraged.
“We understand the concerns that are in Kentucky. I disagree with that court decision but I think there’s an opportunity for us,” Colyer said.
While Colyer wants work requirements, a Democratic governor may dismantle KanCare.
Sen. Laura Kelly, a Democratic candidate for governor who sits on the Legislature’s KanCare Oversight Committee, said she would move the state back to a not-for-profit model and create an organization like the Kansas Health Policy Authority, which ran Medicaid before KanCare.
The three insurance companies that run KanCare made a combined $65 million in profit last year, according to state figures. Their combined profit margin was 0.62 percent.
“That is my plan, to bring that back under government direction, because that way we benefit from any savings that we might see and our people benefit from any additional services that we might be able to provide if we’re not having to give a profit to other folks,” Kelly said.
Democratic candidates Josh Svaty and Carl Brewer have also expressed opposition to privatized Medicaid. Barnett, a moderate Republican, said Kansas should look at forming its own not-for-profit organization to oversee Medicaid.
Although conservative Republicans don’t take issue with privatization, they promise significant changes, too.
Kansas Secretary of State Kris Kobach said if elected governor he would reform KanCare by implementing concierge medicine. Under his plan, patients would pay their doctor $50 a month for unlimited primary care visits and doctors would dispense prescription medication directly to their patients, “taking out the middle man,” his campaign said.
“It’s time to bring this innovative development to KanCare,” Kobach said.
Rep. Dan Hawkins, a Wichita Republican who chairs the KanCare Oversight Committee and supports Colyer, said he and the Colyer administration are already working on a concierge medicine plan for KanCare.
A meeting is set for next week between Colyer administration officials, himself and others on the topic, Hawkins said.
“This isn’t something new. This is something we’re trying to get through right now. So for him to come in and say ‘I’m going to propose this’ — well, you’re coming in and proposing something this administration is already working on,” Hawkins said.
Hawkins acknowledged room to improve, but said the biggest problem the program has faced is the processing of applications by its contractor, Maximus.
Kansas brought in Maximus to operate the KanCare Clearinghouse, a central facility for processing applications. But officials found the company’s performance was in some many cases well below expectations.
Maximus failed to fully meet a June 1 deadline to improve or face fines. The state has not yet said whether the company will face financial penalties.
Hawkins said KanCare had overall made the Medicaid system more efficient, however.
“My opinion is if you were to give KanCare a grade, I think you would probably give it a B,” he said.