House health committee approves one-year ban on reworking KanCare provider contracts

TOPEKA — Deep division marked the House health committee’s vote Monday to advance a bill forbidding Gov. Laura Kelly from proceeding with a plan to rebid contracts with companies providing $3.9 billion annually in Medicaid services to children, elderly and disabled.

Kelly’s plan was to issue a request for proposals in October before selecting a set of providers before the current agreements expired at the end of 2023, but the GOP-led House Health and Human Services Committee approved a bill halting that timeline for one year to allow voters to decide whether the Kelly administration or a new governor would be responsible for that contracting process.

Committee chairwoman Rep. Brenda Landwehr, R-Wichita, pressed hard for passage of the bill, which moved to the full House on a 9-6 vote. Landwehr said it would be improper for a Democratic governor to move ahead with the contracting process with a re-election campaign so close at hand, because the Republican winner in the governor’s race would be held to whatever Kelly devised. The likely Republican nominee for governor is Attorney General Derek Schmidt.

It wasn’t clear House Bill 2463 would be endorsed by the committee after a majority voted last week to suspend debate until Schmidt’s office issued a nonbinding opinion about whether it was legal for the state to award a no-bid, no-questions-asked contract extensions.

“We still don’t have an opinion from the A.G.,” said Rep. Susan Ruiz, a Democrat from Shawnee, who request the opinion from Schmidt. “The whole legality of this whole bill is still in question, in my mind.”

Critics of the legislation raised concerns that no one testified before the committee in favor of a contract extension — not even executives of the three companies currently holding KanCare contracts. The company officials routinely make presentations to the Legislature’s joint KanCare oversight committee.

Rep. Christina Haswood, D-Lawrence, asked Landwehr why the MCOs weren’t interested in testifying about advantages and disadvantages of postponing work on new contracts.

“It’s about extending their contracts and I’m not sure they would want to get into that debate,” Landwehr said. “You’re more than free to call them and talk to them.”

The current set of managed-care insurance companies are United Healthcare, Sunflower State Health Plan and Aetna Better Health for Kansas.

If the House bill survived the political gauntlet at the Capitol, the extension would have to be negotiated with those companies and approved by the federal Centers for Medicare and Medicaid Services. CMS has a significant role in determining policy on Kansas’ Medicaid program because the federal government provides most of the funding.

The committee’s bill was amended at Landwehr’s behest, but the state Medicaid director in the Kansas Department of Health and Environment indicated those adjustments were insufficient to alleviate apprehension a law forming an unbreakable roadblock to new contracts would make the Medicaid program less nimble in response to emergence of new drugs, therapies or other conditions.

During the one-year delay, the Legislative Coordinating Council comprised of state legislators from both political parties and the House and Senate would be in charge of deciding on “substantive or material” adjustments to KanCare.

Originally, the bill called for a two-year delay on implementing new Medicaid contracts. That was whittled down because CMS officials said they wouldn’t approve such a protracted delay.

Rep. Bill Clifford, R-Garden City, said he voted for the bill because it required KDHE to request an extension from CMS. He also said he was convinced the federal agency would reject the proposal from Kansas.

Privatization of Medicaid was launched in 2013 under the direction of Republican Gov. Sam Brownback. He extended the first round of KanCare contracts by issuing an executive order, not by gaining consent of the Legislature. In 2018, GOP Gov. Jeff Colyer announced seven months before his term as governor ended that Aetna would replace Amerigroup Kansas as one of the KanCare contractors.

In 2019, Kelly warned Aetna executives the company was in jeopardy of being dropped by the state due to shortcomings in delivery of Medicaid services.

Under the House bill, new contracts wouldn’t take effect before Jan. 1, 2025. Absent the legislative delay, Kelly would implement new contracts on Jan. 1, 2024.

Heather Braum, health policy adviser for Kansas Action for Children, said the House bill’s vague and broad language was an “attack on our state’s Medicaid program.”

“The effects will be detrimental to Kansas families and children, and we urge lawmakers to vote ‘no’ when it hits the House floor,” she said.

Correction: A previous version of this story incorrectly listed the hometown of Rep. Susan Ruiz, D-Shawnee.