A new audit questions the Kansas health department’s decision to continue providing medical benefits for less affluent Kansans who were no longer eligible to receive aid from the state’s MediKan program.
The audit, done by the state’s Medicaid inspector general, reported the state health department paid about $1.7 million in medical claims for Kansans who had exceeded their 12-month lifetime eligibility limit set for the program.
MediKan is a totally state-funded program that covers all or part of the cost of medical care for individuals with severe disabilities or face catastrophic illness who do not qualify for Medicaid.
State administrative regulations limit benefits to 12 months in a lifetime.
MediKan provides limited benefits to adults – from 18 to 64 – who earn little and whose applications for federal disability are being reviewed by the Social Security Administration.
The program cost the state about $7.7 million in fiscal year 2021 with a monthly average of 2,087 beneficiaries of which an avererage of 854 used the services in a given month.
The audit by Medicaid Inspector General Steven Anderson found that state picked up the cost of medical claims for 912 ineligible people from Jan. 1, 2018, to April 30, 2021
The audit said the state continued MediKan eligibility past the 12-month time limit during the COVID-19 pandemic after a policy directive was issued in March 2020 saying that benefits would not be discontinued with certain exceptions.
A new federal law increased the amount of federal matching funds states would receive for Medicaid on the condition they didn’t end Medicaid eligibility other than for beneficiaries requesting to end benefits or they no longer lived in the state.
The auditor, appointed by Republican Attorney General Derek Schmidt, pointed out that MediKan is funded solely by the state and does not receive federal matching funds.
As a result, the Kansas Department of Health and Environment was not required to extend MediKan eligibility past the 12-month lifetime limit policy, the audit said.
“We appreciate the work of the Medicaid inspector general and welcome the opportunity to further improve state medical assistance programs,” the agency said in a statement.
The ageny said enrollment in the program was higher than usual from July to October 2020, before the agency verified it could terminate MediKan coverage without putting increased Medicaid funding at risk.
The audit sampled 88 beneficiaries and found that 79 had their coverage continued past the 12-month limit because of the policy directive issued in March 2020.
In the cases of the other nine, the audit found five had coverage periods set with the wrong expiration months, one was given benefits without any explanation in the beneficiaries’ file and five received benefits numerous times over different periods.
The agency changed directions in October 2020 when a new policy directive was issued that authorized that benefits could be ended, the audit said.
The audit said that staff from the Kansas Department of Health and Environment had already begun the process of removing 556 individuals from the program who were identified as no longer eligible for MediKan.
The audit estimated that the agency’s action would save about $1.2 million based on the amount of claims for the past year and extended out for six months.
“How quickly KDHE processes the cases and terminates their eligibility will impact the estimated savings,” the audit said.
The agency said that of the 912 beneficiaries who were identified asreceving MediKan benefits beyond the 12-month limit, it has determined that 457 were discontinued before the audit was released.
As of July 29, the remaining 455 beneficiaries had been discontinued in the state’s eligibility system.
The audit found that the KDHE manual that spells out assistance eligibility for medical programs for seniors and Kansans with disabilities contradicts the state administrative regulations for MediKan.
The agency’s staff, the audit said, is now editing the manual so it aligns with state administrative regulations.
KDHE said it now has a reporting system in place to ensure all MediKan recipients are discontinued timely.