Kansas hospitals wary of KDHE budget cut option

Photo by Jim McLean/KHI News Service Shawn Sullivan, director of Gov. Sam Brownback’s budget office, left, and Raney Gilliland, director of the Kansas Legislative Research Department, spoke Wednesday at a media briefing about revisions to the state’s official revenue projections.

By MEGAN HART

One of the governor’s options to patch a hole in the state budget includes a $35 million cut from the Kansas Department of Health and Environment, a move a hospital group says could harm its members.

Gov. Sam Brownback laid out three proposals to patch the budget hole last week after revenue projections for this budget year and the next were lowered by $350 million. One of the options includes the $35 million KDHE cut.

Budget Director Shawn Sullivan said the cut likely would force KDHE to reduce payments to the three managed care organizations that administer KanCare, the state’s privatized $3 billion Medicaid program. The companies likely would pass on those cuts to doctors and hospitals in the form of lower reimbursements, he said.

Medicaid already has lower reimbursement rates than Medicare and private insurers for many procedures, said Cindy Samuelson, spokeswoman for the Kansas Hospital Association. Hospitals often take a loss when treating Medicaid patients, she said.

The association couldn’t estimate the impact of potential cuts without more specific information, Samuelson said, but any reduced reimbursements would harm hospitals.

“We do not think it is a good idea to cut Medicaid provider payments at a point in time we have struggling hospitals in our state,” she said in an email. “As an alternative, the governor should be exploring expanding KanCare to help address the state’s budget shortfall, support KanCare providers and to help working Kansans.”

Cassie Sparks, a spokeswoman for KDHE, said the department is “evaluating the options available to reach the budget proposal.”

Two of the KanCare managed care organizations — Amerigroup and Sunflower State Health Plan — declined to comment on the possible effect of cuts to KDHE. A spokesperson for the third, UnitedHealthcare, couldn’t be reached for comment.

Kansas legislators return Wednesday to the Statehouse to wrap up the 2016 session.

Megan Hart is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team. You can reach her on Twitter @meganhartMC