TOPEKA (AP) -- Blue Cross Blue Shield of Kansas will not bid to be included in Gov. Sam Brownback's plan to overhaul the state's Medicaid program, saying the proposal would require the company to make dramatic changes before 2013.

An executive with Blue Cross, the state's largest insurance company, said in a letter Wednesday that it devoted significant time and staff analyzing the governor's proposal to contract this year with three companies to manage Medicaid, which provides health coverage to poor families and disabled and older Kansans. The contracts would take effect Jan. 1, 2013.

"In the end, although we believe the (Medicaid contract) may present a sizeable opportunity, it would have required us to dramatically change our business model to serve new populations in different settings in less than a year," wrote Angie Strecker, director of institutional relations for the insurance companies. "We decided that we could not responsibly commit to so great a change at this time."

Rep. Jim Ward, a Democrat from Wichita, said the decision raises questions about the financial feasibility of the governor's plan, The Wichita Eagle (http://bit.ly/wfdyma) reported. On Wednesday, Ward introduced a bill that would require annual audits to ensure that privatization doesn't reduce services to Medicaid recipients.

Blue Cross, a mutual insurance company owned by its customers, covers 880,000 Kansans and operates in all Kansas counties except Wyandotte and Johnson. In 2010, the company processed more than 16 million claims worth more than $2 billion.

The Brownback administration last week applied for a waiver from the federal government to allow the change this year. Under the governor's plan, everyone who receives health care through Medicaid would be moved into a private managed-care program. The governor said the change would save the state money while also streamlining services.

The change would affect about 350,000 Kansans and $2.8 billion in state spending.

Miranda Steele, spokeswoman for the Kansas Department of Health and Environment, said the state cannot comment on Blue Cross' decision because the bidding process is still open. Technical bids were due Tuesday and the deadline for filing the financial component of the bids is Feb. 22.

Ward's bill would require the state to contract with the Kansas Health Institute for an annual audit and evaluation of services provided by contractors in the Medicaid program. The audit would include whether changes were made to the quality or quantity of service, whether the number of people receiving services has changed and whether rates paid to health care providers have changed, as well as a survey of contractors and service recipients to gauge satisfaction.