Kansas Health Institute
March 5, 2012
By Mike Shields
TOPEKA — Experts on the nation’s Medicaid program say that Gov. Sam Brownback’s plan to remake the state’s system for delivering health care to the poor, elderly and disabled is among the most far-reaching in the United States. And it faces an uncertain likelihood of gaining full approval from the federal government, least of all in time to meet the governor’s Jan. 1 target for implementing the changes.
“It’s a pretty ambitious undertaking, especially on the long-term care side,” said Joan Alker, a professor at the Georgetown University Health Policy Institute in Washington, D.C., who has studied the governor’s KanCare plan and other state Medicaid reforms and is an expert on the Medicaid waiver process.
“I don’t think people understand the magnitude of what this is,” said Bob Day, a retired policy consultant in Maryland who served as Kansas Medicaid director under Republican Gov. Bill Graves and Democratic Gov. Kathleen Sebelius. “It’s a big deal to get Medicaid to approve it. Whether they can do it in the time frame they’re talking about seems not realistic to me.”
Sebelius, now U.S. Secretary of Health and Human Services, would have broad latitude under federal law to accept or reject key elements of the Brownback plan, a major — but secondary — part of which is sharply at odds with views expressed by senior health officials in the administration of President Barack Obama.
Alker said part of the Brownback plan — a “global waiver” request that would halt future increases in federal Medicaid spending in Kansas while freeing the state from federal Medicaid rules — “smacks of a lot of ideological talking points.”
And “when political battles enter into it,” she said, “that’s generally not the most productive path.” Brownback officials concede that portion of their plan is “contentious.”
For that reason, they say, it would be a follow-up or “second track” to the main part of their proposal, which they say should find federal favor because it would focus on providing better coordinated care for Medicaid beneficiaries while saving the state and federal governments at least $850 million over five years.
“We purposefully asked for a two-track waiver process, which will separate more contentious issues associated with the global waiver from those waivers that have been granted in other states,” said Kari Bruffett, assistant secretary for policy and external affairs at the Kansas Department of Health and Environment, which oversees the Kansas Medicaid program.
Bruffett also said the plan’s timeline shouldn’t be a problem.
“Texas’ most recent waiver to expand managed care and begin health system transformation was submitted July 15, 2011, and approved Dec. 12, 2011,” she said.
‘No Plan B’
But there is nothing in federal law or regulations that would require Sebelius to approve or even consider the state’s waiver request in the timeframe that Brownback officials are banking upon. And past waiver approvals of this type — though generally less ambitious — under current and previous federal administrations usually haven’t happened in six months or less.
There have been a few exceptions, most notably a Florida waiver application submitted when that state’s governor was Jeb Bush and his brother, George W. Bush, was president. That waiver was approved in eight days, an apparent record.
Complaints about how that was handled contributed to Congress adding a provision to the 2010 Affordable Care Act that requires state and federal governments to each allow at least 30 days for public comment on waiver applications before they are submitted or approved.
Brownback officials said they were confident they would get the federal nod.
“There is no Plan B” if they don’t, Lt. Gov. Jeff Colyer recently told KHI News Service.
Florida on Aug. 1, 2011, submitted a request to amend an existing waiver that in many ways would make that state’s Medicaid program similar to what Kansas is proposing.
It would expand managed care throughout most of the Medicaid population statewide and allow the state to charge premiums to some beneficiaries. Seven months later, federal officials haven’t ruled on the request other than to reject parts of it and suggest that the state resubmit its request in another form.
Basis for optimism
Brownback officials said there are several reasons they are optimistic about gaining the needed sign-offs on the various aspects of their plan, which would be implemented under a so-called “1115 waiver” from the Social Security law that governs Medicaid.
Brownback officials said there are several reasons they are optimistic about gaining the needed sign-offs on the various aspects of their plan, which would be implemented under a so-called “1115 waiver” from the Social Security law that governs Medicaid.
“We’re encouraged by our ongoing conversations with CMS,” Bruffett said, an impression buttressed by a conference call with federal officials as recently as late February.
The feds also would need to approve whatever contracts and rates the state agrees to in negotiations with the managed care companies it hires to essentially run the day-to-day operations of the state’s Medicaid program if the KanCare plan moves forward.
Those negotiations with the managed care companies currently are under way, and the state has yet to deliver to federal authorities its 1115 waiver application.
In late January, however, Brownback officials submitted a brief concept paper, broadly outlining the waivers it intends to seek and how KanCare would work should the application be approved.
Since passage of the Affordable Care Act in 2010, federal health officials have stepped up their efforts to promote better coordinated or “integrated” health care aimed at eliminating redundant or unnecessary services and providing preventive or early treatments to ward off more expensive or less effective crisis care.
Those goals at first glance would seem a neat match with those outlined by Brownback officials for KanCare, a major thrust of which would be to “move all Medicaid populations into an integrated, person-centered care model.”
Dual eligibles
Moreover, federal officials have recently shown particular eagerness to work with states on demonstration projects aimed at coordinating care and reducing health costs for so-called “dual eligibles”: people who are entitled to services from both the Medicare and Medicaid programs.
Medicaid is the joint federal and state program that brings medical and long-term care services to children, pregnant women, the elderly and disabled who are poor. Medicare is the federal program that covers health services for all Americans 65 and older.
The so-called “dual eligibles” — most of whom are frail, elderly and poor — are among the most expensive people to treat, and according to Kansas Secretary on Aging Shawn Sullivan, Kansas has about 67,000 of them.
Sullivan said the Brownback administration wants to partner with the federal government on a demonstration project aimed at dual eligibles in tandem with the KanCare plan. The feds have signaled they might want to move forward with that dual-eligible pilot by Jan. 1, the start of the Medicaid plan year and when KanCare is proposed to launch.
“They have demonstrated very much a willingness to work with us on that,” he said.
Kansas officials are proposing that the project include all dually eligible Kansans and that the services they receive be overseen and coordinated by the same three managed care companies they are in the process of choosing to run KanCare.
But inextricably hitching the dual-eligible project to the more expansive KanCare plan essentially assures that the dual-eligible effort, which might have moved forward relatively quickly and easily with federal officials, now becomes more complicated.
And if the feds reject KanCare, that also would undo the state’s plan for dual eligibles.
Dave Halferty, chief financial officer at the Kansas Department on Aging and a member of the KanCare procurement team, said Kansas has until April 2 to submit its “formal application” for the dual-eligible project to the federal Centers for Medicare and Medicaid Services.
CMS officials ‘hard to read’
He said he has been in close contact with CMS officials on the project and the discussions generally had been positive. However, he said it was difficult to tell from the discussions what CMS officials were thinking about the Kansas proposals, either the dual-eligible piece or the more encompassing KanCare.
“It’s been hard to read,” he said. “At times, I’ve felt like they’ve been almost anxious to have us participate (in a dual-eligible demonstration project), and at others times I felt they were concerned we were pretty busy with what we already have going” with KanCare.
“In general, it’s been positive. They want to see the best system in place, as we do. The most integrated system will create the best outcomes and be the most cost-effective.”
But if Sebelius rejects the state’s 1115 waiver request, or major portions of it, that would send the state back to square one on its dual-eligibles project.
“It would require totally starting over with another application,” Halferty said. “Maybe even delaying it a year. I think everything we’re going to do is tied to KanCare. So in that regard, I guess we are tied to that 1115.”
CMS and HHS officials did not respond to questions about the dual-eligible or KanCare proposals. Nor did they respond to repeated requests for an interview.
Those familiar with how the agencies operate said it would be unusual for them to make public comments regarding state waiver requests while the proposals are being discussed or negotiated.
Brownback officials also have said that they are optimistic about federal approval because they are not asking for anything that hasn’t previously been granted to another state.
But experts on 1115 waivers say HHS has not yet approved a waiver request that includes all the disparate elements in the KanCare plan and certainly not in a way that would allow them to be implemented all at once for the entire Medicaid population statewide.
