State keeps troubled contractor at higher cost

National News

August 23, 2018 - 9:28 AM

TOPEKA, Kan. (AP) — Kansas plans to continue its contract with a business that processes Medicaid applications despite complaints about its performance — and will pay the business more while taking over some if its duties, a state official told lawmakers.
The Kansas Department of Health and Environment will extend its contract with Maximus beyond the end of the year and will not sue the company for failing to meet its obligations under the current contract, agency Secretary Jeff Andersen said Tuesday. Maximus will provide $10 million to the state in “concessions,” he said.
Maximus was hired in 2016 to run a clearinghouse where applications are sorted for KanCare, the state’s Medicaid program. Critics have complained that chronic understaffing at one point caused a backlog of thousands of unprocessed applications.
Although that backlog has been reduced, advocates for Medicaid recipients say problems persist, The Wichita Eagle reported.
Andersen said the health department next July will take over processing the most difficult applications for KanCare.
“This contract was underbid in an effort to get the contract, and in many cases, Maximus was not adequately staffed throughout this contract, which we’ve heard time and time again. In some cases, you get what you pay for,” Andersen told the legislative KanCare Oversight Committee.
He explained the state isn’t in a position to bring in a new contractor in January, when Maximus’ current contract expires, and doesn’t have the capacity to process all Medicaid applications itself.
The health department will ask for $2 million in additional funding for the current fiscal year, which will be used to help the department prepare to take over processing some Medicaid applications, he said.
“There’s some short-term pain to get out of this hole,” Andersen said.
In a statement sent Tuesday evening, Andersen stressed that his department is working to ensure Maximus’ performance is up to standards.
Maximus spokeswoman Lisa Miles said in a statement that the original contract’s scope has expanded in the last several years, requiring additional staff. She said the company has funded “significant financial investments” in adding support staff and other resources, which has led to a reduction in the backlog and an improvement in the company’s performance.
Several lawmakers on the committee expressed frustration with the arrangement.
“I have a real problem with that. It’s almost like we’re rewarding their underbidding to get the contract in the first place,” said Sen. Laura Kelly, a Democrat who is running for governor.
Rep. Dan Hawkins, a Wichita Republican who chairs the committee, said the situation “seems kind of weird” from a business standpoint and that he agreed with Kelly’s comments.


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