Medicaid providers are bracing for cuts to their reimbursement rates as the Kansas Medical Society said Tuesday that Gov. Sam Brownback’s office had informed them reductions are on the way.
Fears have mounted in recent days among providers for the state’s Medicaid program, KanCare, that budget-balancing measures taken by Brownback will target them.
Brownback must take action on budget legislation by Thursday and has signaled he will announce cuts beforehand — meaning an official announcement could come at any time.
Details on the potential cut are scarce, said Rachelle Colombo, the Kansas Medical Society’s director of government affairs. The governor’s office didn’t provide a percentage or a dollar figure, she said.
In April, the administration put forward three budget-balancing options that listed agency cuts. The most severe option would implement a 5 percent reduction at the Kansas Department of Health and Environment — the agency that administers KanCare. A reduction of that size would amount to about $35 million.
Nevertheless, the governor’s office made clear the cut will happen, according to Colombo.
“We were told that cuts are going to be happening. It wasn’t put out as a potential,” Colombo said.
Rep. Dan Hawkins, a Wichita Republican who chairs the KanCare Oversight Committee, indicated he believes a cut will take place but that details hadn’t been provided to him. He said he keeps hearing speculation but hasn’t been able to confirm information.
Hawkins indicated he would have questions related to access if a cut is announced.
“Does that start hurting access?” Hawkins said.
Brownback’s office declined to confirm a cut will be made, but didn’t rule it out either. The potential cut was first reported Tuesday by The Wichita Eagle.
“Our office is reviewing the budget and will announce final decisions later this week,” said Brownback spokeswoman Eileen Hawley.
A cut to reimbursement rates would likely be part of a larger package of reductions that would probably also target state agencies and higher education.
Rep. Jim Ward, D-Wichita, said a KanCare cut would harm the state’s medical infrastructure. “It’s playing with fire,” he said.
The last significant cut to Medicaid providers came under Democratic Gov. Mark Parkinson, who cut reimbursement rates by 10 percent in the midst of the Great Recession (though the cut was later paid back). Shortly after entering office in 2011, Brownback announced cuts but specifically shielded Medicaid payments.
“I talked to Gov. Parkinson several times in the transition process, and one of the things that he told me he lamented was that cut in direct reimbursement in Medicaid because it directly hits providers, but it also makes less providers available for Medicaid recipients — that’s the most vulnerable population, of course,” Brownback said at the time, according to the Kansas Health Institute news service.
Now faced with a budget bill that doesn’t balance the state’s budget, he appears poised to turn to an option he once avoided. The possibility has providers like Jenian, Inc., on edge.
Jenian CEO Marilyn Kubler said other providers she knows are fearful and she worried some may close under a significant cut.
“That’s scary as hell. We’re just sort of bracing for the worst,” Kubler said.
Cindy Samuelson, spokeswoman for the Kansas Hospital Association, said the point of KanCare was to help the state avoid provider cuts. The Brownback administration oversaw the creation of KanCare in 2012, with three managed care organizations operating within the program.
“It would be very unfortunate if there would be cuts,” Samuelson said.
During the last cut, providers laid off staff. But even after the reduction was paid back, staff weren’t necessarily re-hired, said Mitzi McFatrich, director of Kansas Advocates for Better Care. She expressed concern any cuts could affect both care and access to care.
Faced with rate cuts, some small community providers might drop out of the program or shutdown, McFatrich said.