Kansas and KanCare felt the brunt of federal officials for being out of compliance with federal statutes and the main man who created these problems is catching well-directed darts from the president of the Kansas Hospital Association.
The state’s privatized Medicaid program, KanCare, received notice that the feds have rejected an extension because it has failed to meet federal standards and risked the health and safety of enrollees.
What would happen if KanCare dissolves at the end of the year? A source close to the situation said no one really knows, except probably the hospitals will be forced to absorb the costs and that would put an undue burden on their budgets.
The letter was sent to Kansas officials on January 13 but they didn’t release it to the public until late last week.
Health care in Kansas must tend to the needs of its citizens, first and foremost; however, the industry is a powerful economic tool for the state. Hospitals and health care systems generated $14.6 billion in income and $24.7 billion in sales last year, ranking it fifth among all economic sectors in the state. Hospitals alone have a total impact on Kansas income of nearly $9 billion, and they employ more than 84,000 people throughout the state.
Those figures are according to a Health Care Sector report for January 2017. In the report, Kansas State researchers identify three primary ways health care influences local economic development: health care attracts and retains business, attracts and retains retirees and creates local jobs.
Governor Sam Brownback gave his annual state of the state address to the state legislature and went to great lengths to compliment the administration’s KanCare program. He also praised his decision to refuse to follow “the siren song of the Affordable Care Act.” He mocked Medicaid expansion as “free” money and said expanding it was akin to “airlifting onto the Titanic.” He also predicted the states that expanded Medicaid were going to face a “severe” reckoning when Obamacare was repealed and replaced.
Tom Bell, Kansas Hospital Association president, took exception to the remarks in a press release: “I doubt many healthcare providers would agree with the governor’s assessment as shown in the study we recently completed and presented to the legislature. I did think the choice to make an example of the Titanic was an interesting one for a state facing a $350 million shortfall between now and July 1, and upwards of a $500 million shortfall next fiscal year.”
Bell also said he had a difficult time understanding how the expansion states would somehow suffer. He pointed out that 62 U.S. senators are from expansion states. “Are they going to just sit by while their states face this ‘reckoning?'”.
The Medicaid money certainly isn’t free because it’s money that Kansans are sending to Washington every day that is simply not coming back to the state, Bell noted. The federal government spends $1.3 for every dollar the state spends on Medicaid. If Kansas fails to meet federal standards, it will put that money at risk.
One of the governor’s targeted revenue measures is to increase the hospital tax so that the 4 percent Medicaid rate cuts can be reversed, Bell said. The governor also suggests using some of the funds for rural healthcare in ways that have not yet been specified.
“Let’s be clear,” Bell said, “the governor is proposing that hospitals ‘buy back’ the rate cut he put in place last summer. This is akin to a lifeguard pushing someone in the pool and then charging a fee before throwing him or her a life preserver.”
The money belongs to Kansas hospitals, Bell said, and that money goes to treat sick and injured people.
“To unilaterally propose more than doubling this tax demonstrates a lack of understanding about where those funds come from and how they were meant to be used,” Bell said, noting that a tax increase of 2.5 times the current amount certainly is not modest.
“Hospitals and health services truly are an economic anchor in our state,” Bell said. “This report documents the importance of the health care sector to the Kansas economy. While the estimates of economic impact are substantial, they are only a partial accounting of the benefits that health care in general, and community hospitals in particular, provide to the state. Kansas community hospitals help stabilize the population base, invigorate their communities and contribute significantly to quality of life.”
Federal authorization for Kansas’ privatized Medicaid system ends at the end of this year. The state must submit a plan to address federal officials’ concerns by Feb. 17.
Brownback’s administration dismissed the federal conclusions as being politically motivated. But lawmakers said they felt blindsided and that more oversight and changes were needed.
Kansas privatized its $3.4 billion Medicaid program in 2012 at Brownback’s urging, shifting the bulk of responsibilities for providing services to three managed-care organizations.
The Kansas City Star reported that the Centers for Medicare & Medicaid Services received complaints from beneficiaries, health care providers and advocates throughout 2016 and conducted a series of interviews with state officials and the three companies providing coverage, the letter to Kansas state officials said.
Health care advocates say the CMS findings confirm issues they have raised for years.
“We’re in a political space and anyone can question motivations, but there are significant and real problems with KanCare, and these are not new issues that are being brought to light. They deserve serious reconciliation,” Rachelle Colombo, director of government affairs for the Kansas Medical Society, which represents physicians, told the Star.
Among the problems identified by CMS investigators: The state lacks a comprehensive system for reporting and tracking critical incidents for beneficiaries on the disability waiver, and no data exist to show unexpected deaths were investigated within required timeframes.
The letter also faults the state for allowing the managed-care organizations to develop their own appeals processes. Under federal rules, the state should have developed or approved that process.
CMS “uncovered significant compliance deficiencies” in crafting plans for beneficiaries, the Star story continued. The managed-care organizations asked beneficiaries to sign incomplete agreements without the number of hours or types of services they would receive and revised plans without the beneficiaries’ input, the letter said.
Sean Gatewood, the co-administrator of the KanCare Advocates Network, acknowledged to the Star that the new Donald Trump administration could be more lenient on Kansas. But he said the letter “puts the Legislature on notice that the system is fundamentally flawed, and they need to take some pretty serious corrective actions.”
Gatewood cited the lack of timeliness on the letter, saying, “That the administration has had that for this whole week and has been marching around the state telling the Legislature, the people of Kansas, that KanCare is in great shape, and they’ve had that letter that talks about how this is putting lives in danger.”
Representative Dan Hawkins, a Wichita Republican who chairs the Legislature’s KanCare Oversight Committee, called the news devastating and criticized the administration for not informing lawmakers immediately, according to the Star. “Everybody was blindsided in the Legislature,” Hawkins said.
Not only are patients at risk under the auspice of KanCare and other state health programs but the economy also could suffer.
Jobs are an essential part of the economic impact. Health funds flow to businesses and throughout the economy as hospitals purchase goods and services. Hospitals generate more than $3 billion in local retail sales in Kansas each year. Additionally, the hospital sector generates nearly $200 million in state sales tax. These are critical funds that the state uses for important programs such as education and transportation.
Hospital officials say the positive effects of health care services in the state will grow even more if Kansas can develop a solution to expand the KanCare program. The ability to cover more than 150,000 low-income Kansans has the potential to inject $2.4 billion in federal dollars into the Kansas economy between 2016 and 2018, according to study commissioned by the Kansas Department of Health and Environment.
Bell said the economic challenges required a community-wide response involving government, business and civic leaders, adding that, “Expanding KanCare will add needed dollars that will grow the economy, creating jobs and supporting the state’s budget through increased revenues and cost savings.”
The study also found Kansas hospitals generate more than $5.7 billion in direct labor income to the Kansas economy each year.