Committee adopts conference positions on KDHE additions; approves Medicaid outpatient rate boost and Gainwell contract funding

The Senate Ways and Means Committee reviewed House adjustments to the Kansas Department of Health and Environment (KDHE) budget and took several actions affecting provider rates, hospital funding and Medicaid administration contracts.

Megan Leopold of Legislative Research summarized the House—s changes, which the committee then considered. The House additions reviewed included a $10,000,000 appropriation to adult inpatient behavioral health services to be distributed among hospitals based on adult behavioral bed capacity, a $10,000,000 addition (including $4,000,000 SGF) to increase Medicaid dental rates, pediatric Medicaid rate increases and a targeted dental code increase to reimburse sedation dentistry performed in operating rooms.

Why it matters: The actions affect hospital and dental provider reimbursements, Medicaid administration, and small targeted public-health programs. Committee votes included a Senate motion to add Medicaid outpatient rate funding and a separate motion to fund the state—s Medicaid management contractor, Gainwell Technologies, to cover increased contract costs.

Key House adjustments noted by staff

- Restored $9,000,000 reappropriation lapse for FMAP savings used in HCBS improvement projects (previously noted in KDADS presentation).

- House added personnel: 30 FTE positions funded entirely by federal funds (House restored 30 of an agency request for 46 FTEs that the Legislative Budget Committee had deleted).

- Provider rate changes and pilots: $10,000,000 for adult inpatient behavioral health distributed across six hospitals; additions to dental and pediatric Medicaid rates; payment changes for wheelchair maintenance and donated-dental services; and two additional newborn screening tests for FY2026.

Committee actions and notable motions

- Medicaid outpatient rate increase: Senator Fagg moved to add $20,000,000 SGF (and $50,000,000 all funds) to increase hospital outpatient Medicaid rates for FY2026 to address hospital financial stress. The committee adopted the motion as a conference position.

- Gainwell Technologies contract funding: Senator Fagg also moved to appropriate additional funds to cover increased contract expenditures with Gainwell Technologies (the state Medicaid management-system contractor). The committee approved specified SGF and all-fund amounts for FY2025 and FY2026 to ensure system continuity and avoid payment delays.

- 30 FTE positions: Senator Peck moved that the Senate not add the 30 House-restored FTE positions (citing vacancy concerns and future SGF risk if federal funding ends). The motion to delete the 30 FTEs (for FY25 and FY26 line items cited) carried on a committee vote.

- TB control funding: Senator Petty moved and the committee approved a $96,000 increase to KDHE TB control efforts following testimony about a local outbreak and rising medication costs.

- Medicaid continuous eligibility (12-month): Senator Erickson moved to eliminate the Medicaid 12‑month continuous eligibility policy for able-bodied adults (moving to month‑to‑month eligibility), estimating state savings of $4–9 million annually; the committee approved the motion after debate about administrative costs and impacts on beneficiaries.

Speakers (selection)

- Megan Leopold — Legislative Research (KDHE presenter). - Senator Fagg — Mover of outpatient Medicaid rate increase and Gainwell funding. - Senator Peck — Moved deletion of 30 House-restored federal FTE positions. - Senator Erickson — Moved elimination of 12-month continuous eligibility for some adults on Medicaid. - Senator Petty — Moved TB-control funding increase.

Clarifying details

- Adult behavioral health add-back: $10,000,000 (House addition) to be distributed to six hospitals based on adult behavioral bed counts. - Medicaid outpatient rate motion (Sen. Fagg): $20,000,000 SGF; $50,000,000 all funds (FY2026). - Gainwell contract amounts: committee approved multi-year SGF and all-fund appropriations to cover increased vendor costs (details provided in the green sheet motion).

Next steps and risk

Several actions were explicitly framed as conferenceable positions with the House. The committee repeatedly noted implementation risks if federal support or ARPA interest transfers are changed in later stages. Deleting federally funded FTEs was justified in committee by vacancy rates and concerns about future state SGF exposure should federal funding terminate.

Searchable tags: KDHE, hospitals, Medicaid rates, dental rates, Gainwell, TB control

Provenance

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