- Associated Press - Saturday, May 24, 2014

WICHITA, Kan. (AP) - The three private insurance companies managing the Kansas Medicaid program lost a combined $110 million in the first year of operating the program, according to a state agency report.

The Wichita Eagle reports (https://bit.ly/SslExt ) an official with the Kansas Department of Health and Environment said whether the three companies make money is not a concern and the early losses were expected when the KanCare system was launched in 2013.

“The idea, the very concept of KanCare, is an investment in preventive services and other services and care to reduce costs,” said Kari Bruffett, director of health care finance for KDHE ” It’s a long-term investment not only in savings but in better outcomes.”

The three companies managing the KanCare Medicaid program are Amerigroup, United Healthcare and Sunflower State Health Plan, a division of St. Louis-based Centene. The program provides services for the poor, elderly and disabled.

“All three have sound financial parent entities and have enough capital on hand to ensure meeting the requirements of the contract,” said Bruffett, who will become secretary of the Kansas Department for Aging and Disability Services in June.

Rep. Jim Ward, a Wichita legislator who serves on a KanCare oversight panel, said it would be disruptive if the companies continue to lose money and walked away from the contracts.

“If it doesn’t work, they will leave,” said Ward, a Democrat. “Fundamentally, at the end of the day, they have to make profit. They have shareholders and stockholders that hold them accountable.”

The three companies are contracted to manage the state’s health care program for three years.

Molly McMillen Malat, spokeswoman for United Healthcare, said in an email to The Eagle that it was difficult to predict financial performance in new business ventures and that “some level of financial volatility” was expected in the first year of KanCare.

“Programs focused on preventive services and engaging individuals on Medicaid in their health care will ultimately lead to better health outcomes and lower costs for the state,” she said.

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Information from: The Wichita (Kan.) Eagle, https://www.kansas.com


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