- Associated Press - Thursday, January 19, 2017

TOPEKA, Kan. (AP) - Federal officials are threatening financial sanctions after finding the state’s privatized Medicaid program “is substantively out of compliance” with federal law and regulations, including not adequately overseeing the companies the state contracts to run the program.

The federal Centers for Medicare and Medicaid Services told state officials last week that it was denying the state’s request to extend the program, known as KanCare, for another year because of problems it found within the program. The letter said the state will face financial sanctions if it does not submit a corrective plan by Feb. 17 for KanCare, which covers more than 400,000 people, has an annual cost of about $3.4 billion.

Lt. Gov. Jeff Colyer said in a statement Thursday that the federal action is “an ugly parting shot” at Gov. Sam Brownback from the outgoing administration of President Barack Obama. Obama is a Democrat; Brownback and Colyer are Republicans who’ve strongly criticized Obama’s health care policies.

“It is politically motivated pure and simple, and we expect the situation to be resolved quickly once the new administration in Washington comes to office.” Colyer said.

And Susan Mosier, secretary of the Kansas Department of Health and Environment, said the state began addressing the issues after receiving a preliminary audit in November and she was confident the program eventually would be extended through Dec. 31, 2018.

The Centers for Medicare and Medicaid Services sent separate letters last week to Mosier and Michael Randol, director of the division overseeing Medicaid, detailing its concerns, based on numerous complaints it received and an on-site review last October. The Topeka Capital-Journal first reported on the letters.

“The results of our on-site review confirm that Kansas is substantively out of compliance with federal statutes and regulations, as well as its Medicaid state plan,” one letter said.

Kansas turned over the daily administration of its Medicaid program to three private health insurance companies in 2013. The state had planned to offer new contracts to private companies for KanCare this year, to take effect at the start of 2018. But Brownback’s administration delayed the process a year, arguing that major changes in federal health care policy could be coming with President-elect Donald Trump’s administration.

Brownback and Colyer have regularly said KanCare is a major success that’s delivering better coverage and improving participants’ health while controlling costs.

But in the CMS letter to Mosier, James Scott, a regional administrator, said the state had not provided adequate oversight for its contractors and that the oversight declined over the past four years. The letter also said significant deficiencies existed in planning for some participants’ care, as well as problems with the information provided by the companies about their provider networks and no comprehensive system for tracking “critical incidents.”

State Rep. Dan Hawkins, a Wichita Republican and chairman of the House Health and Human Services Committee, agreed that the action was likely to be overturned by the Trump administration but he conceded the program has problems that the state is trying to work on. The Senate Public Health and Welfare Committee plans to question Mosier during a Monday meeting and Hawkins said he expects to have hearings as well.

Senate Minority Leader Anthony Hensley, a Topeka Democrat, said he was surprised by the letters’ tough tone but not by the substance because legislators have been hearing such concerns for several years.

“This is the strongest indictment against a state Medicaid program that can be leveled by CMS,” Hensley said. “This program is fatally flawed and deeply in trouble.”

And Sheldon Weisgrau, director of the Health Reform Resource Project, a health care reform education group, said KanCare stakeholders and their advocates should feel vindicated because they have been telling the state about the program’s problems for years.

“All the aspects of the program, the state of Kansas has designed and agreed to. They are simply not meeting even their most minimum commitments to the taxpayers of the state and the beneficiaries of the program,” he said.

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Allison Kite in Topeka contributed to this report.

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Follow John Hanna on Twitter at https://twitter.com/apjdhanna .

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Information from: The Topeka (Kan.) Capital-Journal, https://www.cjonline.com

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