Kansas Medicaid Application Backlog Climbs Again

Dec 20, 2016

The Medicaid application backlog in Kansas is on its way back up, threatening months of progress on a coverage problem that has vexed health care providers across the state.  

For more than a year, providers that rely on Kansas Medicaid, or KanCare, have been stung by delayed payments as they wait months for eligibility determinations that by federal rule are supposed to take no more than 45 days.

Nursing homes have been particularly hard hit, because about half of Kansans living in nursing homes rely on Medicaid to pay for their long-term care after their savings run out, and the long-term care applications are the most complex type within Medicaid.

Rodney Whittington, CEO of Villa St. Francis in Olathe, has worked 18 years as a nursing home administrator. He has been frustrated to have to devote much of his time for the last year to chasing Medicaid reimbursements for Villa St. Francis residents.
Credit Andy Marso / Heartland Health Monitor

Rodney Whittington, CEO of Villa St. Francis in Olathe, said news that the backlog is increasing again is frustrating given how much time he has spent chasing Medicaid reimbursements this year for the assisted living facility.

“It’s taking a lot of my efforts and energy away from things that really could make a difference when this (Medicaid eligibility) system used to be automatic,” Whittington said. “We could count on payment and we could worry (instead) about the operations of the facility to improve the lives of our residents.”

The backlog began in the summer of 2015 with the rocky rollout of a new computer system for processing applications called the Kansas Eligibility Enforcement System, or KEES.

It grew at the end of 2015 when Gov. Sam Brownback made an administrative change that funneled all Medicaid applications through a single KanCare Clearinghouse run by the Kansas Department of Health and Environment.

The Kansas Department for Children and Families, which had been processing complex long-term care applications for elderly and disabled Kansans, handed off thousands of those applications to Clearinghouse workers who had little experience processing them.

Within months the backlog burgeoned to almost 11,000, in part due to a rush of new applications that were referred to the state during the open enrollment period for the federal Affordable Care Act.

The state hired new workers and brought over some from DCF to help process applications and gradually reduced the backlog during the summer of 2016. State officials estimated it would be eliminated by the end of September.

That didn’t happen.

The state trimmed the backlog to 1,486 applications — most of them for long-term care — in September, but since then the numbers have been climbing.

The most recent data available shows 2,247 applications pending 45 days or more. The number of new applications — those pending 15 days or less — also has grown substantially since open enrollment period for ACA insurance began Nov. 1.

Download the KDHE Chart: Kansas Medicaid Application Backlog 

Rep. Dan Hawkins, a Republican from Wichita, warned months ago that if the state had not cleared the backlog by the time open enrollment started this year, it might never get caught up. He reiterated his concerns last week.

“So now exactly what I said back in August and then again in early November has come to pass,” said Hawkins, who chairs the Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight. “That we didn’t get caught up, that our situation is now increasing and it’s going to continue to increase now.”

Meanwhile, the financial strain of coverage delays is starting to radiate from nursing homes to other state services, local governments and even the Catholic Church.

Growing reluctance

Leavitt Partners, a health policy consulting shop, released a report on KanCare last month that touched briefly on the application backlog.

The report — commissioned by the Kansas Hospital Association, Kansas Medical Society and Kansas Association for the Medically Underserved — stated that interviews with medical providers found the cost burden for the backlog shifting to areas like Adult Protective Services, or APS.

APS is a Kansas Department for Children and Families program that seeks to remove vulnerable adults from situations in which they are being physically or emotionally harmed or financially exploited and refer them to a safe place — sometimes a nursing home.

Theresa Freed, a spokeswoman for DCF, said via email that there’s no evidence of cost-shifting from Medicaid to APS.

“We have no reason to believe, nor is there any reliable data showing, that last summer's eligibility delays were causing increased costs to the Adult Protective Services (APS) program,” Freed said. “KDHE has been very receptive in working with APS on crisis cases to get Medicaid eligibility established.”

But some nursing home administrators say bad experiences with Medicaid applications have their facilities more reluctant to take in elderly Kansans referred by APS if they don’t have a secure payment source.

“We’ve just had some real nightmares of episodes,” said Cindy Luxem, president and CEO of a nursing home advocacy organization called the Kansas Health Care Association.

Crystal Peterson, owner of Peterson Nursing Home in Osage City, said her facility took in an elderly man referred by APS who applied for Medicaid in May and was not approved until last month.

She said the backlog was only part of the problem. The man’s application also required financial documentation, but APS closed his case and ignored her requests for help.

“We had no power to get to any of these documents he needed,” Peterson said. “APS was the only one who had the power. … I’ve just never had two systems fail so poorly for one gentleman.”

Denise Hoback, the billing specialist for Brookside Retirement Community in Overbrook, said her home took a referral from APS last year of an elderly woman whose children had taken all her money.

The woman applied for Medicaid in December 2015 and received a denial letter stating she was not eligible financially because she had assets that she had given to her family.

Hoback said that in the past, when long-term care Medicaid applications were processed by DCF, the workers processing the woman’s application would have known that the APS referral meant she had been financially exploited by her family.

But that information had not made it to KDHE and its contractors.

“I really honestly believe at this point … the individuals processing the applications had no understanding of what APS was,” Hoback said.

Brookside cared for the woman without pay for eight months until her Medicaid coverage was approved. Hoback said the facility ultimately received back payments, but cash flow was tight because seven of the facility’s other 71 residents also were waiting months for Medicaid coverage at the time.

“I was at my wit’s end,” Hoback said.

It took direct intervention by Luxem to help get the eight covered, and Brookside’s response has changed when APS asks for a referral.

“Let’s get their Medicaid approved, and then we’ll look at it,” Hoback said. “You can only take so many for the team. You can’t staff a nursing home and have everybody be in a no-pay status.”

Hoback said she would not be surprised if other nursing homes are following suit, leaving APS with fewer referral resources.

Robin Arnold-Williams, one of Leavitt Partners’ principal researchers, said that’s what her team heard while conducting interviews with hospital officials in May, June and July.

In a recent phone interview, Arnold-Williams said the hospitals reported abused adults staying longer as APS struggled to find them a nursing home placement. She said the Leavitt report should have more clearly stated that the costs to APS were indirect — that the agency wasn’t paying for the extended hospital stay but was expending resources while contacting multiple nursing facilities.

“It does imply that APS was paying for services, and I think it’s more that APS is trying to get access to services and the delay that was caused there,” Arnold-Williams said.

Church filling the gaps

Whittington, the head of Villa St. Francis, said providing a safe, clean home for elderly Kansans regardless of their wealth is part of the home’s mission as a Catholic institution.

Officials at Villa St. Francis in Olathe have delayed improvements, including replacement of flooring in this hallway, this year while awaiting approval of residents’ Medicaid coverage.
Credit Andy Marso / Heartland Health Monitor

But he said “there’s no reliability any more” in the Medicaid application process, and cash flow concerns have forced him to make decisions that run counter to the mission.

“There’s a point at which you still have to do business,” Whittington said. “So we have stopped saying yes to Medicaid-pending people.”

Few facilities rely more on Medicaid than Villa St. Francis, where about 70 percent of the 170 residents have no other method of payment.

Whittington said he has delayed improvements like kitchen updates and replacement of some flooring this year while he waits on Medicaid coverage for residents.

“It’s financially been hampering us all year long,” he said.

At one point, his facility was owed about $1.3 million for 40 residents whose Medicaid applications were pending.

He saw some progress after Hawkins and other members of the KanCare oversight committee expressed displeasure about the backlog to KDHE officials in August.

But he said he still has more than 20 residents with pending applications and about $750,000 in bills outstanding.

The state has established a process for homes to apply for half-payments for Medicaid-pending residents whose applications appear likely to be approved. 

Whittington said he applied for the funds when his facility still had more $1 million in Medicaid bills.

“I’m expecting a big check of like $600,000, and I actually got $70,000 and a bunch of denials,” Whittington said.

Angela de Rocha, a spokeswoman for state agencies, said via email that she was glad Whittington used the advance payment system and it worked properly.

“The denials were a result of the applicants not meeting the financial qualifications for Medicaid and several duplicate applications,” de Rocha said via email. “The agency cannot authorize care and/or services to individuals who are not eligible. So his $1.3 million is not really a ‘backlog’ issue, as much as it is a financial eligibility issue relative to the applicants.”

Whittington said he believes the residents are all eligible for Medicaid. He added that in his 18 years as a nursing home administrator, he’s never had so much trouble getting Medicaid approvals.  

In the absence of Medicaid payments, he’s been relying more and more on the generosity of church parishioners.

“Honestly, the only reason we make it is due to the support of the Catholic Archdiocese of Kansas City,” Whittington said. “They’ve helped keep us afloat.”

Local government help

Salem Home, a small nursing facility in the central Kansas town of Hillsboro, doesn’t have the backing of the Catholic Church.

So its leaders turned to their city government for help in October.

The city’s Public Building Commission owns the local medical center and leases space in it to the nursing home.

“What we agreed to do is just subsidize (the rent) for six months,” said Hillsboro Mayor Delores Dalke.

Peter Mungai took over as Salem Home’s new director in October and faced cash flow issues that he told a local newspaper were due in part to delayed Medicaid payments and state budget cuts .

Dalke said the break on the rent was a gesture of goodwill for Mungai as he tries to improve the facility’s financial picture.

“We were in a position to do it, and with them changing administrators and everything we felt like it was the right thing to do,” Dalke said.

She added that with only two nursing homes in town and an aging population, city leaders want to make sure Salem Home remains financially viable.

But Dalke said she wasn’t aware that nursing homes across the state are having similar problems getting payments for Medicaid residents.

The rental subsidy for Salem Home amounts to about 2 percent of the city’s total operating budget, and Dalke said legislators would be hearing about it if the Medicaid application process doesn’t improve.

“What I’m going to have to do,” Dalke said, “is tell the people over here to raise more Cain in Topeka.”

Andy Marso is a reporter for KHI News Service in Topeka, a partner in the Heartland Health Monitor team. You can reach him on Twitter @andymarso