TOPEKA – Gov. Sam Brownback’s administration this morning announced a major Medicaid reform package that will shift thousands of disable, elderly and low-income residents into a managed care system that aims to reduce hospital visits and slow the growth of Medicaid spending over the next five years without reducing benefits.
The “person-centered” integrated care program is called KanCare, and it will be managed by three companies that win state-issued contracts and are evaluated and paid based on their outcomes, such as reduced emergency room visits. The contracts are for three years. (View the request for proposals documents here.) KanCare will take effect in January 2013.
The companies will be asked to provide incentives to consumers for healthy decisions, such as quitting smoking and losing weight. And the companies will not be able to reduce the amount they pay to reimburse health care providers.
Medicaid, the state’s health care program for about 350,000 disabled, elderly and low-income residents, is one of the state’s largest expenses. It cost about $2.8 billion in state and federal money last year. Costs have been growing at 7.4 percent per year over the past decade.
Brownback assigned Lt. Gov. Jeff Colyer to lead a group of state agency in the reform effort. The group has worked more than nine months, including multiple meetings with health organizations and town hall-style meetings in several cities across the state that Brownback’s administration says drew a total of about 1,700 people.
Officials project the reform package to save $853 million over five years, which translates to slowing the growth of Medicaid spending by about a third. But the officials provided only a few details today about how they calculated the projected savings. They said that efficiencies, competition and a better coordination of care for those who need the most services will result in savings. One move will make 3-5 percent of payments as an incentive for quality improvements, another will penalize companies with low quality or insufficient reporting. Read More