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KDHE asks committee to restore lapsed funds for lab move, Medicaid data warehouse, GainWell contract and child‑care pilot
Summary
KDHE leaders requested reinstatement of four lapsed reappropriations and urged funding for Medicaid systems, health‑facility surveys and disease‑investigation staffing. Officials said $2.5 million already was sent to Blue Cross Blue Shield for a state‑employee childcare pilot.
Kansas Department of Health and Environment officials told the committee they are asking the legislature to reconsider four lapsed items and to restore other enhancements the House did not include in its budget bill.
Secretary Janet Stankey said KDHE is requesting restoration of two lab‑related reappropriations — roughly $1.386 million for increased rent tied to a lab relocation and about $429,000 for specialized lab equipment — because the move and purchases are underway and the equipment requires vendor calibration. Stankey described the items as timing issues and said the agency needs the funds restored to avoid delaying the relocation and to ensure patient‑safety functions.
KDHE also asked that $1.4 million SGF (with federal match) be restored for a Medicaid data‑warehouse project already under way. Stankey said that project, which has external vendors engaged, would stop if the reappropriation is not returned: “Should we not get this money, the contract with the vendor… would be lapsed as well as, we would stop dead in our tracks on the progress that we've made,” she said.
KDHE staff and Legislative Research summarized a set of supplemental and enhancement requests. Megan Leopold with KLRD outlined that KDHE carried roughly $63.4 million in reappropriations into FY25; the House restored some items the Special Committee had lapsed, including $9.1 million SGF attributed to FMAP savings and a smaller pregnancy‑maintenance initiative amount. Leopold also reviewed several KDHE system and program requests not included in House Bill 02/2007: a GainWell contract increase (the GainWell fiscal‑agent contract supports the state Medicaid modular system), an electronic pre‑admission screening and resident review system (ePassR), a centralized Medicaid provider credentialing module and additional staffing for disease investigation and facility surveys.
On the GainWell contract, KDHE told the committee the agency negotiated an extension and modernization of the modular Medicaid system that requires increased contract expenditures; testimony listed a FY25 supplemental of about $16.2 million with $4.8 million SGF and a FY26 continuation request of roughly $16.7 million including $5.0 million SGF. KDHE described the increase as a contract‑cost and modernization issue tied to federal CMS requirements.
Leopold and Secretary Stankey also stressed public‑health operational concerns. KDHE said it is behind on federally required health‑care facility surveys because of staffing shortages and is working with CMS on corrective action plans; the agency requested supplemental funding for surveys and for disease‑investigation capacity that covers communicable diseases including HIV, syphilis, tuberculosis and measles. Stankey called those activities “life safety” matters and asked the committee to restore survey funding to ensure ongoing regulatory compliance.
The committee also heard that a childcare pilot project — a public‑private partnership with Blue Cross Blue Shield to convert an old elementary‑school building into a childcare facility for state employees and Blue Cross employees — already received a $2.5 million payment from KDHE for renovation. Adam Proffitt, Secretary of Administration, said the funds were sent in late 2024 and described the resulting program as limited to state and Blue Cross staff; he said the facility will be self‑sustaining and not require ongoing state operational funding. Proffitt cautioned that if the lapse is not reversed KDHE would face a deficiency or would have to terminate the agreement.
KDHE also requested reconsideration of an FY26 enhancement for a centralized provider credentialing module (a multi‑million dollar implementation with a higher federal match) and raised concerns that multiple global budget motions — including a 1.5% across‑the‑board reduction and vacant‑position cuts — could compound agency staffing and operational shortfalls.
No formal vote or committee action on KDHE’s reconsideration requests appears in the transcript. Officials said they are available to answer follow‑up questions and to provide further documentation about contracts and expenditures if requested.
