Controversial freeze on Medicaid contracts approved by legislature

[MM Curator Summary]: Kansas has officially moved the MCO renewal effort past the next election cycle.


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The Kansas Senate approved language early Saturday morning to delay re-negotiation of $4 billion worth of contracts with private firms that serve as managed care organizations after a heated debate.

The move came hours after a member of the negotiation team hashing out an agreement on the bill claimed the provision was part of a “pay-to-play” corruption scandal involving members of the legislature and lobbyists, an accusation flatly denied by Republicans.

In a surreal speech, Rep. John Carmichael, D-Wichita, said he “has reason to believe that the federal authorities are already aware of the proposed legislation introduced today” based on “strong circumstantial evidence.”

He invoked a 2014 scandal where associates of then Gov. Sam Brownback were probed by the FBI in connection with the privatization of the state’s Medicaid program.

“If somebody can come to me and give me a legitimate and good reason that we ought to extend these contracts in a no-bid fashion, that there’s a logical and a good policy reason, I’ll feel a lot better about what we’re doing,” Carmichael said. “But in the absence of such an explanation, I have to conclude that we’re back to pay-for-play politics here.” 

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The comments quickly drew a rebuke from other legislators.

“In this particular setting and with these folks, I believe it was completely inappropriate to cast aspersions within this room,” said Rep. Bradley Ralph, R-Dodge City. “I took offense to it.”

House Speaker Ron Ryckman, R-Olathe, told reporters the accusations were baseless.

“Absolutely not,” Ryckman said when asked if Carmichael’s comments had merit. “I haven’t heard anything on the MCOs. Our reasons for that have been very clear.”

Carmichael doubled down on his comments when asked by reporters.

“There is no justification as a matter of policy as to why this is necessary,” he said.

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Contracts to be renegotiated after 2022 election

The fiery back-and-forth underscored the controversy of the language, which was initially considered as a standalone bill before being added and then removed from the state budget. It eventually found a home in an unrelated bill as legislators negotiated a package of potential legislation.

The Kelly administration was set to launch a request-for-proposal for the three MCO contracts in the fall ahead of a 2023 deadline to select the new vendors. After Brownback ushered in privatization in 2013, a new round of contractors were selected under his successor, Gov. Jeff Colyer, in 2018.

Kansas currently has three MCOs: Aetna, Sunflower Health Plan and United Healthcare.

Now, the contracts won’t be renegotiated until after the November general election, when Kelly is set to stand for a second term, likely against GOP Attorney General Derek Schmidt.

Kelly has panned the idea as “absurd.”

“It’s political, you know,” she told reporters last week. “They want to tie my hands around Medicaid entirely.”

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Schmidt became involved in the dispute in his role as attorney general after Democratic legislators asked for advice on whether lawmakers could interfere so directly with the procurement process.

In an opinion released Friday, Schmidt said the proposal was allowable but said he was unable to say whether the state could be sued over the move or even whether it would be approved by federal regulators.

“The Legislature may lawfully alter the procurement process for a state agency through new legislation,” Schmidt said. “This includes modifying, delaying or eliminating the competitive bid process and directing the (state agency) secretary in its management of the KanCare system.”

In a response, Kelly’s chief-of-staff Will Lawrence called Schmidt’s opinion “cavalier-at-best.”

But Ryckman said the move came about because legislators “are not pleased” with how Kelly’s administration has handled procurement for other major projects, notably a deal to modernize the state’s outdated unemployment backend system.

“The governor is trying to carve out a very important piece of the work the state does for its citizens for particular companies,” Ryckman said. “I want to make sure (companies), for-profit and not-for-profit, both have the opportunity to serve our citizens.”

Andrew Bahl is a senior statehouse reporter for the Topeka Capital-Journal. He can be reached at or by phone at 443-979-6100.


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