Kansas KDADS budget hearing focuses on Medicaid-heavy spending, HCBS waivers and reappropriation of federal ARPA funds

Dayton Lamonian, senior fiscal analyst with Legislative Research, told the House Committee on Social Services Budget that Medicaid makes up the bulk of the Kansas Department for Aging and Disability Services budget: “You see the largest slice of that is titled Medicaid. So 89% of this agency's budget are Medicaid dollars.”

The committee heard a detailed review of the KDADS fiscal year 2025 and 2026 budget documents and a line-by-line accounting of reappropriations, enhanced federal Medicaid matches and governor and legislative budget differences. Lamonian said the agency reappropriated roughly $282.6 million carried forward from prior years, including about $150.5 million for home and community based services (HCBS) waivers that the agency expects to lapse; he also identified a remaining $45 million in enhanced FMAP savings connected to ARPA-era HCBS investments.

The agency’s top executive, Secretary Howard, said the $45 million stems from the American Rescue Plan Act provision that temporarily raised the federal Medicaid match for HCBS and that those dollars were required to be reinvested in HCBS projects. “These funds specifically had to then be reinvested by the state,” Secretary Howard said, adding that unspent funds would have to be returned to the federal government if they were not fully expended by the federal deadline.

Why it matters: KDADS is a Medicaid-heavy agency and tiny shifts in federal match rates or one-time reappropriations affect the department’s ability to maintain provider payments, launch new waivers and fund capital work at the state hospitals. Committee…