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Lawmakers press KDHE and KLRD on provider reimbursement increases and caseload forecasting
Summary
Committee members asked state agency and legislative research analysts how provider reimbursement rate increases affect KanCare costs, federal matching and budget estimates; officials described the state budget appropriation process and how estimates are updated.
Committee members questioned KDHE officials and analysts from the Kansas Legislative Research Department about how increases in provider reimbursement rates flow through KanCare budgets and interact with the federal matching rate.
Representative questions focused on whether state-authorized increases to provider reimbursement translate into higher state costs, more federal dollars or internal reallocation. Bobbi Graff Hendrickson, deputy Medicaid director, and Sheena Schmidt of the Kansas Health Institute explained that higher provider rates increase total program costs; the FMAP determines how much of any increase the federal government pays. “When the state raises a provider rate, then the MCOs have to pay more,” Schmidt said. “And so generally the state, as part of caseloads, that rate that we pay the MCOs will go up.”
Megan Leopold of the Kansas Legislative Research Department walked members through how caseload and rate estimates feed into the budget. She told the committee that estimates are prepared multiple times during the year and that appropriations reflect the most recent adopted estimates; any earlier excess funding is lapsed if not needed under the final adopted caseload.
Why this matters: Provider rate changes and caseload forecasts are the principal drivers of Medicaid spending in the state budget. Lawmakers flagged the fiscal implications of raise proposals and asked KDHE and KLRD for updated estimates.
Key points
- State role: The legislature authorizes provider reimbursement increases; those increases raise total program costs that are reflected in actuarial rate submissions and budget estimates.
- Federal share: The federal match (FMAP) — calculated by a formula tied to per-capita income — determines what share of any increased Medicaid cost the federal government covers. KDHE and KHI said Kansas’ FMAP is approximately 61.87% for Medicaid.
- Budget mechanics: KLRD explained the multi-step estimate process: agencies submit budget estimates, the legislature adopts caseload estimates, and appropriations are adjusted; any unneeded funding generally lapses if the final estimate is lower.
- Fiscal asks pending: Committee members were told KDHE and KHI were updating specific cost estimates related to Medicaid expansion and provider rate changes; KHI earlier cited a prior estimate of about $509 million in federal incentives covering roughly eight years of net state expansion costs, and staff said updated numbers would be released.
Ending
Committee members asked for follow-up fiscal details; legislative research provided a memo on provider rate processes and said more precise caseload and state-cost numbers will be provided on request.
