‘Woodwork effect’ projected to add another 13,400 people by July 2015
by Mike Shields, KHI News Service
Topeka — State officials said they expect more than 13,000 Kansans currently eligible but not enrolled in Medicaid will sign up for it by July 2015 due to greater awareness of the program from the Affordable Care Act and KanCare.
Kari Bruffett, director of the Division of Health Care Finance at the Kansas Department of Health and Environment, said Medicaid enrollment so far this year already has outpaced “normal growth” patterns and that trend was expected to continue at least over the next year or more thanks to the so-called “woodwork effect.”
KanCare, the name given Medicaid in Kansas after the administration of Gov. Sam Brownback rebranded it in 2012, is being promoted on billboards and ads by the three managed care companies competing to attract enrollees to their health plans. And the Affordable Care Act, commonly known as Obamacare, has heightened awareness of the various options available to those needing health coverage, officials said.
How much credit or blame for the growth should be assigned to either initiative hasn’t been parsed yet, legislative and agency analysts said. But they pledged they would try to find out and report back to legislators on that later.
Medicaid, which covers more than 400,000 Kansans, is the federal-state program that provides health care for the poor and disabled.
Bruffett’s comments came as part of a day-long meeting of the Robert G. Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.
The panel had a packed agenda and heard from a stream of state officials, insurance executives, Medicaid providers and beneficiaries.
The providers mostly registered complaints of the sorts legislators have heard in previous meetings about frustrations with KanCare’s administrative complexities and persisting difficulties getting paid in timely and complete manner by the state’s KanCare contractors: Amerigroup, UnitedHealthcare and Sunflower State Health Plan, a subsidiary of Centene.
A couple of providers also told the committee members they were pleased with the KanCare changes, but more said they were having problems.
‘No significant improvement’
Bob Finuf, vice president of payor relations at Children’s Mercy Hospital in Kansas City, Mo., and a member of the hospital working group that has been trying to resolve KanCare payment problems in regular meetings with officials from the state and the KanCare companies, said from Children’s Mercy’s perspective KanCare has improved since its troubled launch in January 2013, “but not significantly.”
Finuf said the hospital has $14 million in unpaid and overdue KanCare payments with two-thirds owed by a single KanCare company: Sunflower State Health Plan.
“From our perception,” he said, “there’s an unwillingness (on the part of the company) to fix reasonable problems.
“We simply did not encounter the number or magnitude of operational and claim payment delays or denials that we have encountered since the implementation of KanCare,” Finuf told the panel. “Kansas Medicaid is our lowest and slowest payer source and the biggest demand on resources in our organization.”
Officials from Newman Regional Health, a small county-owned hospital in Emporia, described the same type of problems and also named Sunflower as particularly difficult to deal with.
“Newman Regional Health continually maintained accounts receivable, productivity and claims processing financial indicators in the top 75 percent of hospitals across the country,” said Karen Hastert, the hospital’s patients accounts supervisor. “Prior to the KanCare implementation, our processes were efficient and effective. It is disappointing to have little or no control over an issue that is so significantly impacting productivity and cash collections.”
‘Not an entitlement’
Top executives of each of the KanCare companies generally struck a conciliatory tone and told committee members that they were working to improve their payment processes and talking with providers about ways to smooth things.
But at one point, Mike McKinney, chief executive of Sunflower, bluntly told the committee that although Medicaid is an entitlement for enrollees, “it is not an entitlement for providers.”
He said managed care is different than fee-for-service care. In so many words, he suggested that providers should just get used to the new way of doing business.
McKinney said managed care works because managed care companies give greater “scrutiny” to bills submitted by providers, disallowing “waste.” He said that hospitals typically note accounts receivables on their ledgers at sums three, four and five times more than they expect in actual payment from insurance companies.
“They show what they billed,” he said. “Not what they’re owed.”
But Committee Chair David Crum, an Augusta Republican who has been among KanCare’s strongest supporters in the Legislature, told McKinney he wanted to see the problems with provider payments settled.
“I’m trying to be patient,” Crum told him. “But it is becoming more difficult. … I’d like to see some positive development.”
‘We’ll do better’
McKinney and the other executives confirmed after questioning by Rep. Jim Ward, a Wichita Democrat, that their companies had lost money the first year of KanCare. But they, and state officials, also said the losses weren’t entirely unexpected because managed care companies sometimes lose money in the first year of a contract.
Laura Hopkins, chief executive of Amerigroup Kansas, said the company expected to become profitable this year. According to filings with the National Association of Insurance Commissioners, the company lost about $32 million.
The Sunflower filings showed about $70 million in losses.
In a later interview, McKinney wouldn’t confirm that, saying he didn’t know exactly how much the company had lost “because it’s not all settled up.”
But he said it was a “considerable amount.”
“I just know we lost money. We’ll do better,” he said.
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