Kansas inspector general’s report identifies weakness in Medicaid financial oversight

TOPEKA – An audit by the Kansas Medicaid Inspector General identified oversight gaps in the state’s home and community service programs that raised questions of potential overpayment to managed care companies and oversight of service weaknesses. an agency of Governor Laura Kelly’s administration.

Medicaid Inspector General Steven Anderson, who is assigned to the state attorney general’s office, concluded on Wednesday that the Kansas Department of Health and Environment lacked “an effective tracking system” for program beneficiaries.

The evaluation covered services provided to individuals enrolled in Medicaid at home or in the community from January 2018 through April 2021. The report was submitted to Attorney General Derek Schmidt, KDHE Cabinet Secretaries, and the Kansas Department of Aging. and Services for Persons with Disabilities, and the Legislative Assembly’s Joint Oversight Committee. for Medicaid.

The state’s Medicaid system, known as KanCare, serves more than 440,000 people. KanCare is a privatized system in which the state contracts with three companies to provide $3.9 billion in services annually.

Home and community services, or HCBS services, are available to people with autism, brain injuries, intellectual or developmental disabilities, physical disabilities, severe emotional disorders, and frail elderly people. Services may include assistance with daily living such as eating, bathing and dressing or may extend to assistance with managing finances or preparing meals.

Anderson’s report said the KDHE lacked an effective system for determining whether Medicaid recipients should be part of the home and community services program. The default raised issues of possible overpayment to KanCare contractors that could be of interest to federal Medicaid regulators, he said.

“KDHE does not have an effective system to track the re-determination of Medicaid recipients on the HCBS program,” Anderson said in the report. “The number and types of findings identified during the audit indicate control weaknesses.”

In addition, Anderson’s report indicates that the three managed care companies, or MCOs, failed to meet their management responsibilities because more than 2,800 people identified as enrolled in the program had no claims for payment during at least 12 months during the 40 month verification period. Individuals must use HCBS services at least once a month to remain eligible.

The amount of state payments to Kansas MCOs incurred to provide services to these inactive beneficiaries totals more than $193 million, according to the report.

“For the scope of this audit,” Anderson’s report said, “MCOs are contractually obligated to monitor the use of waiver services by Medicaid beneficiaries and to make appropriate notifications if the services are not used. It appears, based on the number of Medicaid beneficiaries who do not use waiver services for long periods of time, that this monitoring function is not being fulfilled.

Meanwhile, the inspector general’s report identified 560 KanCare recipients who had no Medicaid claims other than the monthly fee for an emergency response notification system. If the state had simply paid a rental fee for EMS service for these people, the cost would have been $55,000.

However, payments to MCOs operating KanCare statewide totaled $8 million to serve the 560 Medicaid-enrolled beneficiaries.

Both Schmidt and Kelly are running for governor of Kansas in 2022. Kelly is seeking re-election as a Democrat, while Schmidt is the presumptive Republican nominee.

The handling of Medicaid in Kansas became more politicized during the 2022 legislative session when GOP lawmakers moved to block Kelly from working on a new bid for the $3.9 billion annual contract for KanCare.

A budget provision introduced by Republican lawmakers would delay that process until after the November election. If passed, it would amount to a one-year, no-tender extension of contracts with Sunflower State Health Plan, United Healthcare and Aetna Better Health of Kansas.

KanCare, the state’s privatized Medicaid system, was launched in 2013 by Republican Gov. Sam Brownback. The goal was to control state spending on Medicaid and improve services to beneficiaries.

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