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November 2011 St@teside

Kansas Governor Proposes Medicaid Restructuring

On November 8, as part of his efforts to decrease Medicaid spending, Kansas Governor Sam Brownback announced a proposal to overhaul the state’s Medicaid program. According to the governor’s announcement, the proposal aims to create an integrated system—KanCare—that improves quality of care, controls costs, and improves health and wellness.

The plan would create a new integrated, person-centered care coordination system called KanCare and move Medicaid enrollees that are currently in the fee-for-service program—particularly elderly and disabled beneficiaries—to managed care plans. Most low-income beneficiaries are already enrolled in managed care plans. The plan would also reorganize several agencies that are involved in the administration of Medicaid.

To improve quality of care, the state will issue requests for proposals to private contractors to provide services and coordinate all aspects of behavioral and physical health for Medicaid recipients.  According to the executive summary, the contracts will include population-specific and statewide outcomes measures, requirements for the creation of health homes, and financial incentives to encourage quality improvements. Furthermore, they will encourage contractors to use established community partners, including hospitals, physicians, community mental health centers, primary care and safety net clinics, centers for independent living, area agencies on aging, and community developmental disability organizations. State officials expect to select three contractors.

In an effort to increase administrative efficiency, the administration reorganized a number of agencies.  According to the plan, the Division of Disabilities and Behavioral Health Services will no longer be part of the Kansas Department of Social and Rehabilitation Services and will become part of the Kansas Department of Aging (KDOA). KDOA will become the Department of Aging and Human Services and will administer mental health programs and the five state hospitals for the mentally ill and developmentally disabled1,2.

Given the Medicaid spending in Kansas—nearly $2.8 billion— and its fast growth rate, an important goal is to decrease costs3. With the implementation of KanCare, the administration projects a decrease in Medicaid spending of nearly one percent a year, leading to savings of more than $350 million over the next five years for the state and $500 million for the federal government4,2.

The new system will be created primarily through executive orders signed by the governor and will not require federal approval.  However, the administration has also indicated the intention of applying for a global waiver for the Medicaid program. KanCare is expected to begin operating at the beginning of the fiscal year on July 1, 20125

1Gilbert, S. (2011, November 8). Brownback Announces Kansas Medicaid Reorganization. Retrieved on November 16, 2011, from
2Thompson, B. (2011, November 8). Kansas Announces Sweeping Medicaid Restructuring.  Kaiser Health News.  Retrieved on November 16, 2011, from
3Carpenter, T. (2011, November 7). Governor ready to offer Medicaid reforms.  Retrieved on November 16, 2011, from
4Thompson, B. (2011, November 8). Kansas Announces Sweeping Medicaid Restructuring.  Kaiser Health News.  Retrieved on November 16, 2011, from
5Brownback Announces Kan. Medicaid Reorganization. (2011, November 9). Retrieved November 22, 2011, from