Legislative committee hears inspector general audits on Medicaid, prior authorization and pharmacy fees; Accenture briefs on AI for government efficiency

The Committee on Government Efficiency heard a series of audits and briefings on Medicaid payment integrity, prior authorization delays, pharmacy dispensing fees and home- and community-based services during a multi-hour session, followed by a private-sector briefing on using artificial intelligence to find government efficiencies.

The inspector general summarized a performance audit of school-based Medicaid reimbursements that covered a 25‑month period and documented “a lot of overpayments, wasteful payments about $83,000,000,” plus $573,000 in overpayments in a sample, and systemic documentation failures that made claims noncompliant with federal rules. The inspector general said many school claims lacked required physician orders and parental consents, and that errors included use of invalid National Provider Identifiers on claims and missing background checks for some providers.

The audit found that Kansas was paying some school‑based services under a fee‑for‑service model even though those students were already covered by managed‑care organizations (MCOs), and that moving payment responsibility to MCOs could reduce state costs. The inspector general’s office estimated potential annual savings of about $22.5 million if the state moved the school‑based payments to MCOs, and about $47 million across the full audit period if the change had been in effect for the whole audit window. “If they would just move the payment process from fee for service and have the MCOs pay for it, it would save the state $22,500,000 per year,” the inspector general said during the hearing.

Committee members asked how the state and its fiscal agent had missed the invalid NPI entries and background‑check deficiencies. The inspector general said the state contractor Gainwell, which serves as KDHE’s fiscal agent, had responsibility for verifying NPIs and had not done adequate checks; KDHE and Kansas State Department of Education (KSDE) provided written responses in the audit appendix and are working on corrective steps, the inspector general said.

Members pressed about recoveries. The inspector general said the audit identifies overpayments and notes…