Kansas Medicaid Expenditures: Insights into Growth and Impact

Kansas has demonstrated notable growth in Medicaid expenditures per resident, ranking 12th nationally since the implementation of the Affordable Care Act (ACA) in 2014, as reported by the Paragon Health Institute. The state's expenditures increased by approximately 110%, notably surpassing the national average increase of 89%. Kansas remains one of the seven states not to have broadened Medicaid access, including Alabama, Florida, Mississippi, South Carolina, and Texas, while states like Georgia, Tennessee, and Wisconsin have implemented limited Medicaid expansion.

Research by KFF, previously the Kaiser Family Foundation, reveals that states with expanded Medicaid typically spend about $1,000 more per enrollee compared to non-expansion states, with Kansas as an exception to this pattern. Despite not expanding, Kansas has reported higher spending increases than states such as Nevada, Kentucky, and California, despite others like Virginia, Oregon, and New Mexico also reporting substantial increases.

Niklas Kleinworth, the author of the Paragon study, highlights that Kansas incurs approximately $11,000 in costs per enrollee, about $2,500 more than California. In comparison, Nebraska, an expansion state, spends around $10,400 per enrollee. Kleinworth attributes these higher costs in states like Kansas to the managed care model, where private companies administer the programs, differing from the Fee-for-Service model where states directly pay healthcare providers.

Kleinworth explains, “Kansas operates as a managed care organization state, suggesting about 80 to 90% of your Medicaid population is covered under the managed care program.” Although the model aimed to reduce expenses by incentivizing private companies with fixed monthly payments per enrollee, it has yet to deliver substantial cost savings compared to Fee-for-Service states, according to Kleinworth.

Issues of accountability emerge within managed care setups, owing to difficulties states encounter in enforcing contracts and ensuring compliance. Kleinworth mentions that audits often uncover deficiencies in managed care organizations' efforts to manage waste and fraud. Earlier this year, a notable audit by the Kansas Inspector General uncovered nearly $800,000 in Medicaid pregnancy coverage fraud, highlighting fraud in enrollment for pregnancy-related Medicaid benefits.

Kleinworth voiced concerns over ineffective enforcement, revealing instances where states fail to collect imposed sanctions on managed care organizations for contract violations. He referenced a Journal of Managed Care study indicating unresolved sanctions as a significant issue. This analysis sheds light on Kansas's Medicaid expenditures, offering a deeper understanding of the managed care model’s challenges and its implications on state budgets.