Gov. Brownback Endorses Reversing Medicaid Cut He Ordered Earlier This Year By Hiking Provider Tax

Originally published by the Topeka Capital-Journal.
Written by Jonathan Shorman.
August 17, 2016

Gov. Sam Brownback on Wednesday endorsed reversing a cut to Medicaid reimbursement rates that he ordered earlier this year, saying he wants lawmakers to instead increase a tax on hospitals.

The announcement came a day after the state canceled a number of public meetings that had been scheduled to discuss the 4 percent cut to providers in KanCare, the state’s privatized Medicaid system.

The governor argues he attempted to avert the cuts, which he ordered, by negotiating with health care organizations.

“At the end of the 2016 legislative session, we worked with health care organizations to find a solution to offset proposed cuts to KanCare reimbursement by implementing an increase in the provider tax. Those negotiations were not successful, resulting in implementation of a 4 percent cut in reimbursement rates,” Brownback said.

“We will continue those efforts in the next legislative session. I look forward to working with the legislature to restore the 4 percent cut in reimbursement rates and will call on them to pass an increase in the provider tax.”

According to the governor’s office, the provider tax is a fee assessed to hospitals. Increasing the tax would allow the state to draw upon additional federal funding.

Brownback made the rate cuts after the Legislature passed an unbalanced budget. The reduction is expected to save the state about $38 million during the current fiscal year.

Cindy Samuelson, a spokeswoman for the Kansas Hospital Association, said a number of options were on the table in the run-up to the announcement of the rate cut beyond raising the provider tax. She said the rate cut was not a good solution.

Some lawmakers have discussed raising a separate fee on the managed care organizations in order to reverse the reimbursement rate cut. Rep. Steven Johnson, R-Assaria, earlier this summer shared a document that had circulated among lawmakers.

One of the options in the document calls for lawmakers to increase the privilege fee when they return in early 2017.

Sen. Laura Kelly, D-Topeka, said Brownback could have eliminated pain and grief to providers by not cutting provider reimbursement rates to begin with.

“Why didn’t he do this in the first place instead of putting everybody through this very painful exercise?” Kelly said.

Sean Gatewood, with the KanCare Advocates Network, said the idea doesn’t make sense.

“It’s an act of desperation and a shell game,” Gatewood said.

Primary elections earlier this month ensured moderate Republicans, who are opposed to the cut, will hold more power when the Legislature reconvenes in January. Some sitting Republican lawmakers have also said they want to reverse the cut.

“The provider cuts, we all realize, were a very tough thing for the system,” Rep. Dan Hawkins, R-Wichita, said during a meeting of the KanCare Oversight Committee earlier in August.

State officials were roundly criticized during the oversight hearing as lawmakers expressed exasperation with the ongoing problems affecting KanCare — which range from the rate cut to a continuing backlog of unprocessed applications.

On Tuesday, after the cancellation of the KanCare meetings, Kansas said it was mailing about 200,000 letters this week explaining why the cuts were made and directing consumers to alternative ways of voicing their opinion.