[MM Curator Summary]: KS lawmakers are seeking to create a committee that would have to sign off on most Medicaid policy changes, big and small.
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Lawmakers are moving forward with a hotly contested provision to limit changes to the state’s Medicaid program for a year, a move its director has warned could debilitate the program’s ability to make even routine updates.
The proposal, which would also extend the contract of the three insurance companies that serve as managed care organizations for the KanCare program, initially came about as a separate bill.
Concern from lawmakers of both parties initially led to it being tabled in a House committee, but it later passed out and was subsequently added to the state budget. The House version of the budget bill was approved on a 73-49 vote Wednesday.
Rep. Kathy Wolfe Moore, D-Kansas City, Kan., the ranking Democrat on the House Appropriations Committee, called the item’s inclusion in the budget a “poison pill” and questioned its legality.
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“Never before has the Legislature intervened and asked for a no-bid contract extension,” Wolfe-Moore said on the House floor Tuesday. “It has not happened. This smells bad, and I am certain if this goes forward, there will be some kind of investigation into this.”
If approved, the Kansas Department of Health and Environment, which manages KanCare, would have to appeal to a panel of top legislative leaders, called the Legislative Coordinating Council, to sign off on any changes to the Medicaid program.
There is a political dimension to the move as well.
If Attorney General Derek Schmidt, the presumptive Republican nominee for governor, defeats Gov. Laura Kelly in the November general election, it would fall to his administration to determine the framework for $4 billion in contracts to deliver Medicaid services.
Gov. Laura Kelly told reporters the idea was “absurd.”
“It’s political, you know,” she said. “They want to tie my hands around Medicaid entirely,”
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Move would allow delay of Medicaid contract decision until after election
The Kelly administration was set to launch a request-for-proposal for the three MCO contracts in the fall ahead of a 2023 deadline to select the new vendors. Gov. Sam Brownback moved to privatize the state’s Medicaid program in 2013 and a new round of contractors were selected under his successor, Gov. Jeff Colyer, in 2018.
Rep. Brenda Landwehr, R-Wichita, chair of the House Health and Human Services Committee, defended the move as a way of ensuring the next governor, whomever they are, has adequate say in the nature of the KanCare program.
“How would you like to have to pick up on a negotiation that you didn’t start with in the first place?” she told reporters after a hearing on the matter last month. “That you didn’t ask for? That you didn’t want?”
But Schmidt is in the center of the debate in another sense as well.
Democrats requested last month an opinion for the attorney general’s office on the legality of extending the contracts, arguing it runs afoul of the state’s procurement process.
Schmidt spokesperson John Milburn said Feb. 22 that the matter was “under review” but didn’t address the potential conflict of interest involved.
Critics argue that, even if the move isn’t illegal, it would limit the state’s ability to punish contractors that didn’t adhere to their agreements with the state.
“If we truly had a bad actor, and we needed to threaten termination, that would be a meaningless threat really,” Sarah Fertig, KanCare’s executive director, told the House Health and Human Services Committee in February.
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Top officials worry provision could limit Medicaid changes, big and small
In a rare move, no group or individual stepped forward to advocate for the bill in a February hearing and it is unclear who requested the provision’s inclusion in the budget.
Fertig has told legislators the structure could require her division to go before the LCC to obtain approval for even small changes.
But bigger moves would be impacted as well, she noted. Adding new drugs or treatment services would require approval, she said, as would changes to reimbursement rates and a move, desired by members of both parties, to expand post-partum coverage for mothers.
When a RSV outbreak occurred in eastern Kansas, Fertig added, it was necessary to quickly sign off on adding medications to help prevent or treat the virus among vulnerable individuals.
But Landwehr said stability would be a net positive for Medicaid enrollees.
“This is people’s lives,” she said. “And the less disruption that any cost to them the better off they will be.”
There is another consideration as well.
The federal COVID-19 emergency, which has provided for flexibilities in a number of different sectors, also gave states increased Medicaid funding in exchange for a number of temporary changes.
That includes not removing Medicaid participants from the rolls until after the public health emergency had ended, something that is expected later in 2022. This would mean ensuring legislators authorized to sign off on changes had the knowledge needed to address complications that might arise during the process of unwinding the COVID-19 order.
“We would have to bring them up to speed on these issues, coach them through it and then hope that they would vote to let us do what we need to do to manage the program,” Fertig said.
The provision has some distance to travel before becoming law. The budget will be subject to negotiations between the House and the Senate, who passed their own budget bill without the Medicaid provision last week.
Even if it advances, Kelly would have the option to use her line-item veto powers to remove it from the budget, even if she signs the larger spending blueprint.
But House Speaker Ron Ryckman, R-Olathe, defended the policy proposal when speaking with reporters in February, saying it mirrored the way legislators had imposed oversight over how the Kansas Department of Labor and other agencies handled the procurement process.
“We want to make sure that the system is intact and there’s not preferential treatment being used,” he said.
Andrew Bahl is a senior statehouse reporter for the Topeka Capital-Journal. He can be reached at abahl@gannett.com or by phone at 443-979-6100.
