In fiscal year 2010, Kansas spent a total of $2.5 billion on Medicaid, including about $750 million in State funds. In calendar years 2008 and 2009, Kansas paid an average of $2.5 million in State funds for Medicaid emergency room claims. This included 642,000 claims for more than 118,000 individuals. Using a methodology developed by New York University, we estimated that about two-thirds of the emergency room claims were for conditions that didnít require emergency room treatment. Under the most optimistic assumptions, the State could potentially save about $625,000 per year by reducing the number of emergency room visits for non-urgent conditions. Lastly, Kansas already takes many steps to reduce Medicaid non-urgent emergency room use and costs, but we identified seven other strategies, such as operating a 24-7 phone line, that might allow Kansas to make further reductions. We were unable to quantify the potential net savings these strategies might achieve.
Health-Care Related Services: Reviewing Opportunities for Better Coordinating the State's Health-Care Related Programs
By changing Medicaid billing practices, the State could save money spent on inpatient care for Department of Correctionís inmates. Although State agencies could also better coordinate a number of other health-care related programs, service gap issues such as lack of affordable health insurance for low-income single adults can only be addressed through State-level policy decisions. Of more importance is the upcoming federal health care reform, which will greatly affect how health-care related services are provided in Kansas. Its primary goals are to reduce the number of uninsured, slow increases in health care costs, and increase access to health care services and providers. Implementing those reforms will require significant coordination among State agencies. Some State agencies that traditionally have provided health care services will have added responsibilities, while other State agenciesósuch as the Kansas Insurance Departmentówill start having a role. At this point, it is too early to know whether State agencies are on track to implement the various provisions of federal health care reform.
Prescription Drugs: Reviewing What the Kansas Health Policy Authority Is Doing To Control Prescription Drug Costs in the Programs It Oversees
The Health Policy Authority already has implemented several strategies to control prescription drug costs in the Medicaid program and the State Employee Health Plan. We identified five additional strategies for the Medicaid program that could save the Authority between $3.8 million and $4.6 million per year. These include joining a purchasing consortium, regulating mental health prescription drugs, reducing dispensing fees paid to pharmacists, implementing a more aggressive step therapy program, and increasing the maximum amount of certain drugs dispensed at one time. We identified four additional strategies for the Employee Health Plan that could save the State up to $3.0 million per year. These include reducing coverage on some or all prescriptions, increasing the maximum amount of certain drugs dispensed at one time, using a starter dose for new prescriptions, and limiting the number of prescriptions beneficiaries an receive each month.
K-12 Education: Reviewing Issues Related to the Costs of the Health Care Benefits Provided by School Districts (school audit)
Employers join health insurance pools in order to obtain lower and more predictable premiums. Currently there are five such pools available to school districts, including the State Employee Health Plan. We looked but identified only one district that could potentially save money by joining the State plan, primarily because the planís minimum employer contribution requirement is more than most districts currently pay, and because its annual deductible is lower. Because many districts are interested in forming a new Statewide pool of school district employees, we built estimates of what that pool might look like and what it might cost to insure. We looked at a sample of 22 school districts and two service centers and, based on our analysis, it didnít appear that most of them would benefit from joining a Statewide pool, either because they wouldnít save money, or because more out-of-pocket costs would be shifted onto their employees. Finally, if districts were to form a new pool, it would be difficult to sustain without sufficient safeguards, such as screening out districts with less healthy employees, instituting minimum employee participation requirements, or requiring higher employer contributions toward health insurance premiums.
Medicaid: Determining Whether Kansas Could Save Money by Expanding the Use of Managed Care in the Kansas Medicaid Program
Medicaid costs potentially can be reduced by better managing client care and reducing the use of avoidable high-cost services, such as emergency room visits. Kansas and other states have piloted or implemented a number of initiatives aimed at better managing care for high-cost clients, both to improve services to these clients and to reduce costs. Those initiatives often incorporate cost-savings strategies such as improved care coordination, payment incentives, and data management techniques. However, few states, including Kansas, have estimated the dollar savings or effects of these efforts. As a result, itís difficult to know if these initiatives are cost effective, or to estimate what potential cost savings might be possible by further applying these strategies to larger numbers of high-cost clients in Kansas. Regardless, many states we contacted have implemented these strategies on a statewide scale, despite inconclusive evidence that they contain or reduce costs. Thatís likely because the ways in which managed-care systems are supposed to save money are logically intuitive, even if unproven. Kansas has several options for identifying and pursuing cost-savings strategies, including analyses of Statewide medical data and increased use of pilot projects.
Statewide Medical Expenditures: Reviewing Medicaid Expenditures for Fraud and Abuse
Using data-mining techniques we found almost $13 million in suspicious Medicaid claims for federal fiscal year 2006 (the most recent year for which complete data were available to analyze). The suspicious claims included: more than $10 million in claims for more than 10,000 clients whose income appeared to exceed program limits; almost $700,000 in claims for clients who didnít provide a valid Social Security number, almost $600,000 in potential ďupcodingĒ by doctors for office and emergency room visits, and almost $500,000 in other suspicious claims such as claims filed for deceased individuals and charges for non-hospital services when a client was hospitalized. In addition, we identified 519 clients who received prescriptions for controlled substances, such as heavy painkillers and powerful stimulants, from five or more doctors in one year, which may be indicative of potential abuse.
State Agency Information Systems: Reviewing the Kansas Health Policy Authorityís Management of Those Systems
Although there are many good aspects to the Health Policy Authorityís security management system, some important safeguards are missing. The Authority doesnít consider risks that are specific to the agency as part of its risk assessment. It also relies too heavily on default policies without adequately making staff aware of them, and has too many draft policies awaiting approval. The Authority hasnít done an adequate job of promoting security awareness in general among its staff, and management doesnít monitor the implementation and effectiveness of the security system. Despite the problems with the security-management process, the Authority does a good job of technically securing its IT resources. Based on our reviews and on more technical work done by a consultant, we found that the Authorityís network is very well secured. We found few vulnerabilities within the network, and all have been fixed. However, the system the Authority uses to manage employee access to Medicaid data doesnít provide the kinds of reports necessary to properly monitor that access. Finally, the Authority didnít use a systematic process in responding to its security incidents, primarily because it lacked a formal incident response procedure.
Surplus Computer Equipment: Determining Whether State Agencies Effectively Remove Software and Agency Data From Surplus Computers
Agencies often donít remove data from computers that are sold to the public through Surplus Property. We obtained computers from Surplus Property that had belonged to at least six Topeka-based State agencies and found data on 10 computers from four of those agencies. Of the 10 computers that still had data, seven had confidential documents, including thousands of Social Security numbers. It appeared that data werenít properly removed because agencies lacked policies, relied on Surplus Property to do their work, or did a poor job of keeping track of which computers had been processed and which hadnít. The State needs to strengthen its policy for removing data from computers and take appropriate steps to ensure that agencies are educated about the policy and are following it.
HealthWave: Determining Whether the Programís Call Center Is Working As It Should
The Kansas Health Policy Authority contracts with a private contractor (MAXIMUS) to operate a Call Center to serve clients from several health insurance programs under the HealthWave umbrella. The Call Center doesnít have a system in place to ensure that all customer voicemail messages are captured and returned, and it didnít meet its standards for returning phone messages for almost one-third of the 100 sample messages we reviewed. In most cases, initial attempts to return calls were only one day late. However, in two cases, we found no documentation that any attempts to return the calls had been made. Contributing factors included poorly documented policies, weaknesses in how the Authority and MAXIMUS monitor or enforce the contract, and the lingering effects from high call volumes brought on by new federal documentation requirements. Those federal documentation requirements likely caused decreases in HealthWave Program enrollments during fiscal year 2007--especially for Title XIX programs. We think itís unlikely that unreturned phone calls had much impact on Program participation, because most individuals whose calls we reviewed were already enrolled in HealthWave, and anyone not enrolled in the Program could phone the Call Center again or receive enrollment information through other sources.