KanCare Extension Denied After Scathing Review Finds Noncompliance with Federal Law

Kansas hasn’t decided how to respond to denial but is preparing corrective action plan

Posted by the Topeka Capital-Journal
January 18, 2017 10:33 pm - Updated January 19, 2017 05:31 pm 
By Jonathan Shorman

Kansas’ Medicaid program is “substantively out of compliance” with U.S. law, federal officials say — a situation they argue poses risks to recipients and prompted them to deny a request to extend KanCare by a year.

The Centers for Medicare and Medicaid Services (CMS) found serious concerns during an on-site review of the privatized program conducted in October. Limited coordination between state agencies poses a risk to the health and safety of some participants, and Kansas didn’t provide sufficient oversight of the managed care organizations, the review found.

The problems found by CMS, as well as its denial of a request to extend the program by a year, are described in documents obtained by The Topeka Capital-Journal on Wednesday, Jan. 18.

A spokeswoman for KanCare said the agency is preparing a corrective action plan. Gov. Sam Brownback praised the program as recently as last week, when he delivered his State of the State address.

In a letter dated Tuesday, Eliot Fishman, director of the state demonstrations group at CMS, told Mike Randol, the Kansas Medicaid director, that CMS is denying the state’s request to extend its authorization of KanCare for a year, from Dec. 31, 2017, to Dec. 31, 2018. The denial means the state will have to accelerate work on its application for reauthorization.

Fishman cited “substantive concerns” about the implementation of the program in denying the extension of a waiver known as a section 1115 Medicaid demonstration waiver.

Fishman noted that CMS received a significant number of complaints and concerns from beneficiaries, providers and advocates. The complaints and concerns were substantiated during the on-site review, Fishman wrote.

Angela de Rocha, a spokeswoman for KanCare, indicated Kansas is still considering how to respond.

“We are still looking at this and have not had time yet to determine what is the best way forward,” de Rocha said. “It is perplexing that CMS granted 11 other states extensions of their 1115 waivers, but denied Kansas.”

A Jan. 13 letter from CMS detailed the agency’s concerns. In the letter, James Scott, the CMS associate regional administrator for Medicaid and Children’s Health Operation, wrote that CMS received complaints throughout 2016 and conducted the on-site review from Oct. 24 to Oct. 27.

Federal officials interviewed managed care organizations, state agency officials, and held stakeholder listening sessions. CMS also requested documentation before and after the visit.

“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,” the letter says.

Scott noted he wants to “underscore the serious nature of these concerns and the risks it poses to beneficiaries. These concerns affect beneficiaries’ receipt of services necessary to stay in the community, beneficiaries’ ability to access needed care, and the state’s ability to ensure the health and welfare of beneficiaries.”

Among the concerns outlined:

• Kansas failed to establish clear roles and responsibilities for employees who administer and operate KanCare
• Limited coordination between the Kansas Department of Health and Environment and the Kansas Department for Aging and Disability Services poses a risk to the health and safety of Managed Long-term Services and Supports participants, who may experience difficulty managing their benefits
• Kansas didn’t engage in sufficient oversight of the managed care organizations, and while the state receives many reports from the MCOs, no evidence was found of significant analysis or subsequent program changes based on the reports
• Kansas’ oversight of the MCOs diminished over the past four years, as evidenced by on-site reviews of the MCOs and subsequent reports; the 2013 annual report was a comprehensive document but the 2014 and 2015 reports were only two pages long, with little content of substance
• Kansas’ approach to tracking, monitoring and overseeing provider network adequacy and access to care for KanCare consumers is limited, and CMS expects a more robust oversight process including proactive monitoring
• Kansas doesn’t have a comprehensive system for reporting, tracking and trending critical incidents

The letter contains numerous other areas of concern. The letter also requires the state to take action.

“Due to the severe and pervasive nature of the on-site review findings and the resulting impacts this has on the beneficiaries and providers, CMS is requiring Kansas to develop a Corrective Action Plan describing the actions it will take to correct the identified non-compliance,” the letter says.

The plan must include a detailed plan addressing each finding and must include milestones and dates by which the changes will be implemented. The plan is due Feb. 17.

The agency expects Kansas to implement the plan in an “expeditious and transparent manner” and engage with stakeholders. CMS will monitor implementation of the plan.

De Rocha said that KDHE will fulfill CMS’ request, though she noted that “we do not agree with all of their conclusions.” The agency is preparing a corrective action plan, she said.

De Rocha on Wednesday night (Jan. 18) wouldn’t specify what conclusions the agency disagrees with.

KanCare has been troubled by a backlog in processing Medicaid applications over the past year. While the state has significantly reduced the number of outstanding applications, at one point the backlog exceeded 10,000.

Brownback counts the implementation of the program in 2013 among his biggest policy achievements. He extolled the program in his State of the State address last week, as he has in past speeches.

“Fortunately for our budget, Kansas had the foresight to reform Medicaid—a policy others are following,” Brownback said. “Instead of an open-ended fee for service entitlement, Kansas became the first state in America to serve its entire Medicaid population through managed care.”