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Kansas Announces Sweeping Medicaid Restructuring

Kansas Gov. Sam Brownback announced a major overhaul of the state’s Medicaid program today, which would put nearly all Medicaid recipients into private, managed-care plans.  While low-income families are currently in such plans, elderly and disabled Kansans receive care through a fee-for-service system. 

The state has drafted a request for proposals from private contractors willing to provide comprehensive health, mental health and long-term health care services at a fixed rate per person.  State officials say they expect to select three vendors, who will compete for clients.  

At a news conference today, Lt. Gov. Jeff Colyer, a physician and the administration’s point man on the Medicaid reform effort, predicted the changes could slow the growth in Medicaid spending by nearly one percent a year. That would save the state more than $350 million over the next five years and would save the federal government $500 million at the same time.

About 60 percent of Medicaid is funded by the federal government, and federal approval of changes to the state’s Medicaid plan on file with the Centers for Medicare and Medicaid Services will be required before the contracts can be issued.

Colyer emphasized that savings is not the only aim of the plan: “The goal is to get them better care, so instead of ending up at the hospital six times in a year, maybe they’re only in the hospital three or four times, and we can make sure that we are saving money that way, through better outcomes,” Colyer said.

Officials said they also intend to emphasize the use of home and community-based services, which historically have been less costly than the institutional care provided in nursing homes and hospitals.

Anna Lambertson, head of the nonprofit Kansas Health Consumer Coalition, likes the emphasis on health outcomes, but wants to see what actually materializes.

“The devil is really in the details.  When I see the details of the RFP and the details of the contract, I think we’ll know a lot more about how that notion will truly be implemented.”

Lambertson says from a consumer perspective, managed care is not as important as care management.

“We want individuals with chronic conditions — who we know constitute a significant majority of our Medicaid costs, of our health care costs — we want those folks to have access to effective, consumer-friendly care management,” to navigate the health care system, she said.  

The plan would also reorganize social services in the state, shifting the Division of Disabilities and Behavioral Health Services out of the Kansas Department of Social and Rehabilitation Services into the Kansas Department on Aging.  As part of the move, KDoA will take charge of the state’s mental health services, including the five state hospitals for the mentally ill and developmentally disabled.

If approved, Medicaid clients would begin enrolling in one of the comprehensive managed care plans by November 2012.