House committee tables bill awarding no-bid contract extensions to KanCare providers

TOPEKA — Republicans and Democrats on the House health committee voted Thursday to table consideration of a bill requiring no-bid contract extensions for Kansas Medicaid providers until the state’s attorney general delivered an opinion about legality of the maneuver.

The legislation advocated by Rep. Brenda Landwehr, the Wichita Republican chairwoman of the Health and Human Services Committee, would extend contracts with the three for-profit insurance companies operating KanCare until December 2024. That would preserve the existing deal an extra year, if endorsed by federal regulators, beyond the scheduled expiration date of December 2023.

The contracts deliver $3.9 billion annually in health services to more than 500,000 elderly adults, low-income children and people with developmental, intellectual and physical disabilities. State and federal Medicaid dollars flow to one-sixth of the Kansas population under the program. The number of recipients grew to a record level during the COVID-19 pandemic.

Landwehr said impetus for the bill was the upcoming November election for governor between Democratic Gov. Laura Kelly and likely Republican gubernatorial nominee Derek Schmidt, the state’s attorney general. The Kelly administration intended to put out a request for contract proposals in October and planned to select KanCare providers next year. If Schmidt were to win the election, Landwehr said, his administration would need time to come up to speed.

“January 1 we will have a new administration — maybe, maybe not,” Landwehr said. “They should have time … rather than having to jump in and negotiate on something that they didn’t put out in the first place.”

Rep. Susan Ruiz, a Shawnee Democrat on the House health committee, proposed the committee await a legal opinion from Schmidt’s office before voting on the bill. She requested the opinion in a letter to Schmidt. Ruiz’ motion prevailed with backing from GOP and Democratic committee members.

“I’m incredibly worried that we’re setting ourselves up for potential litigation,” Ruiz said. “There’s no competition. No accountability.”

Landwehr originally proposed a two-year extension of Medicaid contracts through the end of 2025, but opposition to that idea led to her downward revision to the one-year extension. She proposed bill amendments that would require legislative leaders or the full Legislature to approve all “substantive or material” changes to the state’s privatized Medicaid program until 2025.

“We’ve got the KanCare program running very smoothly right now,” Landwehr said.

Concern was expressed by some House members and the state’s Medicaid director that the legislative approval process wouldn’t be nimble enough to meet changing health and medical needs of people enrolled in KanCare.

State Medicaid director Sarah Fertig said requiring the full Legislature or the Legislative Coordinating Council comprised of top House and Senate lawmakers to decide each meaningful adjustment to KanCare could create problems getting new medicines or treatments to Medicaid recipients. She said she was convinced “substantive or material” changes to Medicaid occurred on a daily basis in Kansas.

“This would still block us from making swift needed changes to the program in a timely fashion,” Fertig said. “This could still mean that our hands are tied.”

Under House Bill 2463, the Kansas Department of Health and Environment would be responsible for extending contracts of current KanCare providers Sunflower State Health Plan, United Healthcare and Aetna Better Health of Kansas. That contractual arrangement would have to be affirmed by the U.S. Centers for Medicare and Medicaid Services. The federal government provides $2.9 billion annually for Kansas’ managed care system of Medicaid.

Under the bill in front of the Legislature, the new law would take effect within days to halt the Kelly administration’s ongoing work on rebidding the contract on KanCare.

Rep. Kathy Wolfe Moore, D-Kansas City, Kansas, said no person or organization testified in favor of a contract extension before the House committee. None of the KanCare companies have stepped forward to offer insight into putting a freeze on contracts through 2024, she said.

“I have to wonder what procurement rules we’re violating,” Wolfe Moore said. “It will be a no-bid contract that the Legislature is engaging in. If that’s legal, I’d be very surprised. At the least, it looks and smells bad.”