Gov. Sam Brownback says privatized Medicaid is working in Kansas, but some patients and hospitals don’t see it

Finn Bullers spent his 52nd birthday and this past Christmas in the intensive-care unit at Shawnee Mission Medical Center. He wasn’t sick — not beyond the daily ailments that accompany the Prairie Village man’s muscular dystrophy and diabetes, anyway. But he had nowhere else to go.

Bullers can’t survive on his own. He relies on a ventilator to breathe and a wheelchair to move, and when he’s alone he is imperiled by the possibility that the machine could disconnect from his throat. His coordination wracked by the degenerative muscular dystrophy, he wouldn’t be able to reconnect it himself.

That’s what happened just prior to his arrival at Shawnee Mission Medical Center.

Booked for a short stay at the Days Inn in Overland Park, near Metcalf and Interstate 435, a room which he had paid for with the little money he had at the time, he was without the caregivers who usually are with him at all hours of the day — workers paid in part by Kansas through the state’s Medicaid program. (One such worker, Bullers says, once stole his credit cards.) In the night, his ventilator fell out.

“The only thing I could do was bang my head against the door until a neighbor came in and put the tube back in,” Bullers says.

After his weeklong stay at Shawnee Mission Medical Center (at a rough cost of $1,300 a day), he was transferred to the Healthcare Resort of Kansas City, in western Wyandotte County, across the street from Providence Medical Center on Parallel Parkway. Before long, the 90 days he’s allowed to be there will run out, and he’ll have to figure out where to live next.

Bullers, a writer for The Kansas City Star in the late 1990s and aughts, was for a time the face of how Kansas’ decision to privatize its Medicaid program could fail Sunflower State citizens. The policy, called KanCare, put the state’s disbursement of federal money for the most needy into the hands of three private, for-profit insurance companies.

It went into effect on January 1, 2013. A year later, Kansans with disabilities were folded into KanCare. Just before that, Bullers learned that he would not receive around-the-clock care, as he had in the past.

At the time, Bullers lived in Prairie Village with his two children. His story drew media attention (including “Kan’t Care,” in The Pitch‘s November 21, 2013, issue), and his benefits were eventually restored.

The strain — both emotional and financial — of his condition eventually ended his 21-year marriage. He was escorted from his home by a Johnson County sheriff last summer, following a divorce-related court order to leave his family home.

Since then, finding a permanent residence has been difficult — in part, he says, because of the managed-care organization that handles him under the KanCare program. Bullers was ready to move to a Prairie Village apartment when United Healthcare rejected the plan; the company sent him a letter explaining that his care required skilled nursing in the home and that such care couldn’t be provided in the apartment.

That leaves the possibility of living in a nursing home, which Bullers rejects. “I can’t imagine a fate worse than that,” Bullers tells The Pitch.

He may have federal law on his side. In 1999, the U.S. Supreme Court ruled that people with disabilities who receive state-funded support have a right to live and receive services in a community setting, not just in an institution.

Bullers says United Healthcare may be looking at alternatives. Meanwhile, his case demonstrates some of the issues that continue to dog KanCare as it enters its third year.

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While health-care providers tell The Pitch that KanCare works relatively well for patients who don’t rely on it daily, it has led to some struggles for people who require more intensive care. Some health-care providers say KanCare requires a quantity of paperwork that’s cumbersome even by insurance-company standards. They add that the system has routinely denied legitimate claims, forcing delays as hospitals and clinics file appeals. All of which belies the state’s claim that a privately managed Medicaid would streamline the bureaucracy inherent in a state-run program.

The three KanCare MCOs defend their level of service and their interactions with providers, saying the claims processes are nothing out of the ordinary. All three, however, have reported significant financial losses under KanCare. And the road ahead looks no smoother for them — or for people like Bullers.

As Gov. Sam Brownback’s fifth State of the State address crescendoed in the early evening hours of January 12, he made a pair of bold proclamations.

“KanCare is working,” Brownback told the Kansas Legislature. “Obamacare is failing.”

With this statement, Brownback made clear once again that he wants the Legislature to stay the course with KanCare and reject Medicaid expansion, which is an Easter egg for states to consider as part of the federal Affordable Care Act. Medicaid expansion is seen by its advocates as a way to provide more services to the most vulnerable in Kansas and, at least temporarily, give some relief to the financial millstone around the Kansas budget.

Even some members of Brownback’s party say they’re considering it. Jeff King, a Republican senator from Independence, Kansas, gave the notion some tepid support after a hospital in his hometown closed. It’s debatable whether Medicaid expansion would have spared the hospital, but it’s hard to argue it would have hurt.

Unless you’re the governor.

“Today, we have higher reimbursement rates for providers, more services for clients, and most importantly, we have better, measurable health outcomes for Kansans who participate in KanCare,” Brownback said in his speech. “We have also saved nearly $1 billion over the projected cost estimates for the old Medicaid program. We have proven that a Kansas solution is better than one from Washington, D.C.”

Brownback’s push to privatize Medicaid resembles most of his other policies as Kansas governor — an all-in approach that dispenses with pesky questions and ignores calls for moderation or reconsideration.

Other states had shifted smaller segments of their Medicaid programs to see whether such moves would produce the anticipated savings. Kansas was the first state to announce that nearly all of its Medicaid program would go into the hands of private companies, the Brownback-selected Sunflower, United Healthcare and Amerigroup.

Brownback’s fellow Republican governors have eschewed some of his other initiatives — particularly his tax policies, which have left Kansas’ finances in a bind — but some have taken notice of KanCare and are considering replicating it in their states. Iowa Gov. Terry Branstad signed up four MCOs — including United Healthcare and Amerigroup — to handle the privatization of his state’s Medicaid program.

As some newspapers in Iowa have pointed out, however, much of the talk surrounding Kansas’ Medicaid privatization sounds more like cautionary tales than success stories.

Among those who might advise Iowa to think twice are Kansas health-care providers.

On December 29, Kansas lawmakers met for another session of the Robert Bethell Joint Committee on Home and Community Based Services and KanCare Oversight. Officials with Lawrence Memorial Hospital were there, and they painted an ugly picture of how KanCare operates.

LMH’s Susan Thomas, a compliance manager for the hospital, and Taryn Schraad, an appeals specialist, told committee members that the KanCare MCOs were “aggressively denying payment” for LMH claims. They added that about 65 percent of claims correctly submitted to the KanCare MCOs had been denied, setting off the appeals process.

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“The communication of the claim denial is dismal,” LMH’s administrators submitted in written testimony to the committee. They added that United Healthcare, in its denial letters, gives health-care providers incorrect instructions on how to appeal claims.

“Since transitioning from Kansas Medicaid to KanCare, LMH has experienced undue burden in processing claims for healthcare services provided to KanCare patients,” LMH wrote. “This has resulted in an egregious amount of re-work by LMH staff, significant delays in payment, patient concerns and frustration as well as diminished ability to care for some of the most vulnerable residents in the state of Kansas.”

An LMH spokeswoman tells The Pitch that hospital officials plan to return with more information to present to the KanCare Oversight Committee at its next meeting on January 22.

LMH’s testimony mirrors key grievances that other providers have shared with The Pitch. Many providers have asked to remain anonymous, fearing more headaches with MCOs if they speak publicly.

KanCare’s MCOs appear to deny claims at rates exceeding that of private insurers. According to quarterly KanCare reports published by the Kansas Department of Health and Environment, between 17 percent and 19 percent of claims brought to the three KanCare MCO’s were denied payment between January and September 2015. According to the same report, that added up to more than $1.5 billion in denied claims.

Determining how many claims private insurers deny is tricky; insurance companies treat such data as proprietary information. But the American Medical Association took a stab at it with a 2013 report, which pegged the denial rate for private insurers in the single digits.

The Kansas Hospital Association has also raised concerns about KanCare’s treatment of health-care providers.

In written testimony sent to the Bethell Committee in December, the KHA said it had surveyed its members to find out how promptly they were being paid for claims sent to KanCare MCOs. The survey indicated that about one-third of claims submitted to the MCOs had been paid later than 90 days. That’s roughly double the rate of 90-days-or-more collections for Medicare and for commercial insurance companies.

Tish Hollingsworth, vice president of reimbursement for the KHA, says that late claim payments become a problem because once an account payable goes 90 days past due, the chances of recovering diminish significantly. She adds that the denial rates by MCOs may actually be higher because the MCOs classify some claims as “contractual write-offs.” To the hospital, though, it’s the same thing — an unpaid claim.

Hollingsworth isn’t sure exactly what the rate is of claims that are both denied and written off. “It’s fairly high,” she tells The Pitch. “And higher than what the MCOs have reported.”

Of the three MCOs to which The Pitch sent detailed questions, only Amerigroup responded.

“Regarding your inquiry, we comply with the rules and regulations of our regulators, including those related to claims and operations,” Amerigroup spokeswoman Olga Gallardo wrote in an e-mail. “Amerigroup Kansas meets monthly with LMH to provide education, support and identify work issues and concerns, including those related to claims and operations.”

As KanCare enters its third year,
Hollingsworth says hospitals in Kansas have had some success bringing KanCare MCO paperwork in line. But streamlining, the whole point of KanCare to begin with, remains something of a work in progress.

“We’ve made some pretty good strides at getting things as streamlined as we can,” she says. “The hardest thing all our members would say is the administrative burden of having three organizations as opposed to one.”

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Back in western Wyandotte County, Bullers can barely speak above a whisper. A doctor has just taken his blood pressure and promises to return later in the week.

It’s not an ideal situation for Bullers, but it will do for now while he searches for a permanent solution that meets KanCare’s approval. And it’s better than taking up space at Shawnee Mission Medical Center.

“I felt awful [at Shawnee Mission Medical Center],” Buller says. “I never wanted to be in a situation where I was a drain on society. But the system failed again.”