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KanCare Contractor Must Fix Backlog Problems Soon Or Face Fines

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Kansas News Service
Applications for Medicaid coverage in Kansas have been stuck in a chronic backlog. The contractor processing those records is under pressure to fix the problems.

The company that processes applications for Kansas’ privatized KanCare Medicaid program faces potentially steep fines if it doesn’t fix problems, responsible for massive backlogs, by the end of this week.

Maximus, a Maryland-based company that specializes in managing “human service programs” for states and the federal government, has operated the “KanCare Clearinghouse” since 2016.

There have been problems from the start.

In March 2016, federal officials grew concerned about growing backlogs and ordered the state to provide monthly reports about what it was doing to fix the problem.

At the time, the number of unprocessed applications had grown from 10,000 to more than 18,000. Of those, nearly 8,000 had been pending for more than 45 days, the longest time allowed under federal rules.

The backlogs delayed payments to many Kansas nursing homes, sometimes for months. At one point, back payments to some facilities totaled more than $1 million.

Despite periodic improvements, problems persisted.

When Jon Hamdorf took over as Medicaid director in January, federal officials were again threatening corrective actions to bring the state into compliance with rules that require 97 percent of Medicaid applications to be processed accurately. With an error rate of nearly 20 percent, Hamdorf said, Kansas wasn’t close to meeting that standard.

“Our quality numbers are the worst of any Medicaid program in existence,” Hamdorf told lawmakers in January. He told the legislators he had given Maximus until June 1 to comply with the performance benchmarks in its contract or face still fines.

With that deadline now only a few days away, Hamdorf said, there has been progress.

“I will have to commend Maximus they have put a significant amount of resources towards this and we’ve seen a little bit of progress,” he said in an interview this month. “But they’re really going to have to meet their goal. And if they don’t meet their goal we’ll have to proceed with liquidated damages.”

Those retroactive penalties could total hundreds of thousands of dollars per day, which could add up to millions.

Sean Gatewood, co-administrator of the KanCare Advocates Network, said Hamdorf's tenure marks a departure from his predecessor who “did nothing but deny the problem existed, let alone address it.”

He said the state must now press Maximus to fully comply with requirements that prohibit excessive backlogs.

“Just because Maximus raises the bar from our ankle to our knee does not mean that they are doing their jobs,” Gatewood said in an email. “They have had plenty of time, they have been collecting the money, they have not been doing the job. If they are not in full compliance, I think it is time for them to go.”

Lisa Miles, a senior vice president for Maximus, said in a statement that the company expects to meet its “requisite compliance targets” by the deadline.
“Over the past several months, Maximus has invested more than $3 million of its own money in added resources, including additional eligibility support staff, management resources, as well as reporting and analytical staff,” Miles said in the statement.

In addition, Miles said, the company had “revamped” its quality and training programs.

“These investments have delivered meaningful improvements,” she said.

Jim McLean is managing director of the Kansas News Service, a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio covering health, education and politics. You can reach him on Twitter @jmcleanks. Kansas News Service stories and photos may be republished at no cost with proper attribution and a link back to the original post. 

Jim McLean is a political correspondent for the Kansas News Service, a collaboration based at KCUR with other public media stations across Kansas. You can email him at jim@kcur.org.
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