Kansas Budget Plan Includes Major Health Care Changes

Jan 14, 2016

Gov. Sam Brownback’s administration on Wednesday unveiled a budget proposal that would require new KanCare patients to try less-expensive drugs first and end a pilot program to improve the health of Kansans with severe mental illnesses.

Budget Director Shawn Sullivan presented the plan to legislators for $98.9 million in spending reductions in fiscal 2016, and another $105.7 million in reductions in fiscal 2017. About $24 million in the 2017 recommendations would come from the prescription drug change and elimination of the “health home” program for Kansans with severe mental health issues.

Another $14.4 million would come from other changes related to health care, on top of $11.6 million in reduced costs from Medicare Part B the state expects, for a total of about $50 million in lower health care spending in fiscal year 2017.

Those savings would be partially offset, however, by anticipated growth in state Medicaid spending. Budget estimates project the state will spend about $16.6 million more than anticipated in fiscal year 2016 due to increased caseloads in Medicaid and other social programs. It also raised that estimate by $30.8 million for fiscal year 2017.

The proposal called for $10.6 million in savings in fiscal year 2017 from allowing the three managed care organizations that administer Medicaid in Kansas to use “step therapy.” That would allow KanCare to restrict access to more-expensive drugs unless a patient already has tried a less-expensive drug without success.

Current KanCare recipients would be grandfathered in, Sullivan said, but new Medicaid patients would need to try the less-expensive drugs first.

The legislative KanCare oversight committee had recommended in December that the managed care organizations be allowed to use step therapy. The Legislature would have to approve a change to state law for that proposal to go forward, and Sullivan told lawmakers Wednesday he expected to have a bill to show them soon.

Rick Cagan, executive director of the Kansas chapter of the National Alliance on Mental Illness, said step therapy is a particular concern for people who take medications for a serious mental illness. A medication may be effective for one person with depression but not another, meaning that some people would have to wait longer to try the medications their doctors think would be most likely to help them, he said.

“This is a cookie-cutter approach which is going to exacerbate people’s illnesses, lengthen their recoveries and put them at unnecessary risk,” he said. “Individual prescribers need to have the full range of options.”

The health home change would save about $13.4 million by ending one attempt to coordinate health care for KanCare recipients with “severe and persistent” mental illnesses, Sullivan said. A study found participants’ health outcomes improved, but outcomes for KanCare recipients in general also improved, he said.

“The improvements of outcomes they’ve had has been similar to a control group,” he said.

Sara Belfry, spokeswoman for the Kansas Department of Health and Environment, said the control group included KanCare recipients who were eligible for the health homes based on their diagnoses but who chose to opt out. Having the same diagnoses allowed for an “apples-to-apples” comparison based on their health care utilization, including acute care and home and community-based services, she said.

The federal government paid for 90 percent of the cost of the health homes for the first two years, Belfry said, but that rate is due to fall to 56 percent. The state would have had to pay about $13 million annually to continue the health home program starting in August, she said.

Megan Hart is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team. You can reach her on Twitter @meganhartMC