Medicaid Transformation


The overall purpose of the Medicaid Transformation process is to produce and publish regular program reviews to monitor, assess, diagnose and address policy issues in each major program area within Medicaid. The presentation of these reviews is designed to serve as the basis for Division of Health Care Finance (DHCF) budget initiatives in the Medicaid program on an ongoing basis. The recommendations contained in this report are based on the findings of 14 program reviews completed in 2008. They address issues related to decreasing expenditures, improving reimbursement policy, expanding coverage, and enhancing program oversight. An additional 12 program reviews will be completed by the end of 2009.

Chapter 1: Executive Summary

Background, key findings, and summary of recommendations.

Chapter 2: Background, Motivation, & Methodology

As the agency has led a very public effort to engage stakeholders and to reform health policy in the state, it has also engaged in the process of reorganizing and refocusing the agency to expand capacity for data analysis and management, and to adopt data-driven processes in the management of its programs.

Chapter 3: Dental Services

Kansas Medicaid and the State Children's Health Insurance Program (SCHIP) provide a comprehensive dental benefits package for children, some developmentally disabled adults, and adults receiving services through Home and Community-Based Services (HCBS) waivers.

Chapter 4: Durable Medical Equipment

Durable Medical Equipment (DME) is defined as equipment that meets the following conditions:

  • Is appropriate for use in the home
  • Is not generally useful to a person in the absence of an illness or injury
  • Is primarily and customarily used to serve a medical purpose
  • Is rented or purchased as determined by designees of the executive director of the DHCF (K.A.R. 30-5-58)
  • Withstands repeated use

Chapter 5: Home Health Benefits

Home health services include skilled nursing care, home health aide service, and other therapeutic skilled services. Home health services are provided at a patient's place of residence. An average of 145 agencies provides home health services to approximately 5,000 Kansas Medicaid beneficiaries.

Chapter 6: Hospice Services

Hospice consists of a set of enhanced services available on a fee-for-service basis to terminally ill patients who elect to receive these services in exchange for limitations on curative care. Hospice services provide personal and supportive medical care for terminally ill individuals and supportive care to the families through medical social workers, chaplain's services, nutritionists, and other needed service providers.

Chapter 7: Acute Care Inpatient & Outpatient Hospital Services

Kansas Medicaid has 144 acute care hospitals, five state institutions, five rehabilitation hospitals, and three psychiatric hospitals enrolled within the state. Over 540 similar out-of-state hospitals are also enrolled. All but nine of Kansas' 105 counties have an acute care hospital; two-thirds of those (68) have just one.

Chapter 8: Independent Laboratory & Radiology

Laboratory and radiology services are optional services that may be provided through Medicaid. Kansas Medicaid has chosen to reimburse providers for performing these services since they are an integral component of diagnosis and treatment.

Chapter 9: Medicaid Pharmacy Services

In the Fiscal Year 2008, Medicaid fee-for-service pharmacy services were provided to 113,446 unique beneficiaries through 745 contracted pharmacies, with nearly 2 million prescriptions dispensed.

Updated March 25, 2009, to reflect additional information that has become available since the original publication. For a full description of the changes and updates, please click here.

Chapter 10: Transportation Services

Kansas Medicaid provides transportation services for beneficiaries who need emergency transportation or lack transportation services to access routine health care.

Chapter 11: HealthWav

HealthWave is a managed care program through which two populations receive health care services: Title XIX (traditional Medicaid); and Title XXI (State Children's Health Insurance Program, or "SCHIP"). HealthWave now provides capitated managed care through two Managed Care Organizations: Children's Mercy Family Health Partners; and UniCare.

Chapter 12: HealthConnect Kansas

HealthConnect Kansas (HCK) is a statewide primary care case management program established in 1994 to provide Medicaid beneficiaries with access to quality medical care in an efficient and economical manner.

Chapter 13: Medical Services for the Aged & Disabled

The aged and disabled population in Kansas accounts for 33% of the Medicaid population, but 67% of total Medicaid spending. Almost half (47%) of the growth in Medicaid from fiscal year 2007 to fiscal year 2009 can be attributed to the aged and disabled.

Chapter 14: Emergency Health Care for Undocumented Persons (SOBRA)

For undocumented persons, federal Medicaid funds may only be used to provide health care services for life-threatening emergencies or labor and delivery services for pregnant women. The Sixth Omnibus Budget Reconciliation Act (SOBRA) was enacted by Congress in 1986 to provide a funding stream for these services.

Chapter 15: Eligibility Policy & Operations of Public Insurance Programs

This review describes and assesses Medicaid eligibility rules, eligibility policies, and the critical components of the eligibility determination process: Operations, Automated Systems, and Program Integrity.

Chapter 16: Quality Improvement in KHPA's Health Care Programs

The primary goal of quality improvement at DHCF is to use the resources the agency manages to purchase and promote high-quality health care for the populations we serve. Quality health care can be described as successfully obtaining the health care services needed, at the time they are needed, to achieve the best possible results.

Division of Health Care Finance Background

  • Medical Services: In 2006, KHPA was designated as single state agency responsible for Medicaid and SCHIP. However, KHPA only directly administers public insurance programs that provide medical care services, or $1.2 billion of the 2.2 billion spent on Medicaid - SCHIP in the fiscal year 2007. HealthWave (managed care) and HealthConnect (fee-for-service with an additional $2 per beneficiary per month to provide managed care services) are KHPA's two primary public insurance programs. On a monthly basis, we provide medical coverage to over 300,000 people, including more than 125,000 infants and children, and nearly 88,000 elderly and disabled Kansans.
  • Long Term Care and Mental Health: The Kansas Department of Social and Rehabilitation Services (SRS) and the Kansas Department on Aging (KDOA) administer programs that provide long-term care and mental health services, accounting for the remaining $1 billion in fiscal year 2007 Medicaid/SCHIP spending.

Medicaid Transformation Key Findings

  • Cost drivers: While children and families account for most of Medicaid enrollment, much of the increase in expenditures is driven by aged and disabled beneficiaries.
  • Spending increases: Reviews demonstrate increases in spending for hospital and hospice services, durable medical equipment, and pharmaceuticals.
  • Cost Containment: Reviews indicate that KHPA efforts to reduce costs are meeting with some success. For example, recent changes resulted in a significant slowdown in the escalation of costs for transportation services. KHPA also had success in reducing the cost of home health services, saving over $16 million.
  • Recommendations: Reviews demonstrate significant opportunities for Medicaid cost containment and health improvement.

Kansas Medicaid Compared to Other States

Total spending

Overall Medicaid spending per beneficiary is relatively high in Kansas: $5,902 per beneficiary in fiscal year 2005, compared to the national average of $4,662. Per-person spending is higher than average for each major population group (aged, disabled, adults, and children), with the aged and disabled ranking highest among those three populations.

Spending on Aged & Disabled Is Above Average

Compared to other states, Medicaid spending in Kansas is somewhat concentrated among the aged and disabled populations. Kansas ranks above-average spending per person for both the aged (16th highest) and the disabled (also 16th highest), and ranks 14th highest in the percentage of the Medicaid population who are disabled.

Spending on Poor Adults Is Far Below Average

While coverage of children is typical at 200% of the poverty level, coverage for non-disabled adults is very low. Kansas ranks 39th in the percentage of Medicaid eligibles who are low-income, non-disabled, working-age adults, and is ranked between the 41st and 46th in the income threshold for adults in this category. Partly as a result, Kansas ranks near the bottom (43rd) in the percentage of its population covered by Medicaid (13%).