As Kelly ramps up for expanded Medicaid push, auditor finds $16 million in program waste

TOPEKA – As Governor Laura Kelly and Kansas Democrats prepare for what’s expected to be a full-court press for expansion of KanCare (state Medicaid) this legislative session, a state auditor has found some $16 million in program overpayments during a recent audit period.

The report was submitted by Kansas Medicaid Inspector General Steven D. Anderson to Kansas Attorney General Kris W. Kobach, Secretary of Health and Environment Janet Stanek, and the members of the Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.

” Medicaid funds should be used by the people who really need them, and eliminating waste ensures our most vulnerable receive the care they need and that taxpayers have confidence that their dollars are spent wisely,” Kobach said in a statement.

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The report notes continued issues in the financial oversight of the Kansas Medicaid program. The audit concluded that the Kansas Department of Health and Environment (KDHE), the agency responsible for administering the Medicaid program, has control weakness placing Medicaid monies at risk. The report identified significant compliance and control gaps within the Transitional Medicaid Program, or TransMed.  Medicaid beneficiaries are limited to only 12 months of continuous TransMed coverage, but the audit identified 9,322 beneficiaries who were enrolled in TransMed during the audit period that had 13 months or more of continuous TransMed coverage. The performance audit focused on 2,322 beneficiaries who had unallowed coverage prior to the COVID-19 Public Health Emergency. The report identified $16,326,364.59 in payments wasted on ineligible persons as of June 2022. 

Expansion of KanCare would lower the income qualifications to allow more individuals onto the taxpayer-subsidized program, many of whom presently have other insurance through employers, spouse employment or private sources. Estimates say some 140,000 more Kansans could qualify under new guidelines, but actual figures from states having already expanded their programs show enrollment some 160 percent of initial estimates, and per-enrollee costs to exceed estimates by 64 percent. Taxpayers pay 100 percent of the subsidy – 10 percent from the states and 90 percent at present from federal taxes. Republicans in the Kansas Legislature have stymied the expansion due to costs and conceptual differences over lowering the bar to allow more members on the subsidized service.

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The audit also noted that a a lack of consumer education about the TransMed program presents a barrier its beneficiaries who are working towards transitioning to better employment and higher wages, but fear losing Medicaid coverage. Lack of ease of use was identified on the KanCare website when an attempt was made to locate information on the TransMed program. A prior report issued by the Office of Medicaid Inspector General (OMIG) yielded similar findings and recommendations. 

“Our report included several findings and recommendations intended to improve the effectiveness and efficiency of KDHE’s administration of the TransMed Program.” Anderson said. “I am pleased to note that KDHE leadership acknowledged and agreed with the majority of the findings and recommendations and are taking steps to implement the changes.”

The Office of the Medicaid Inspector General is required by state statute to solicit and receive reports of fraud, waste, abuse and illegal acts in such programs.

The report was submitted to Kansas Attorney General Kris W. Kobach, Secretary of Health and Environment Janet Stanek, and the members of the Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.

The audit report is available at here.

To report suspected fraud, waste, abuse, or illegal acts involving the Medicaid, MediKan, or the State Children’s Health Insurance Program, an online form is available at or call (785)296-5050. 

Dane Hicks is a graduate of the University of Missouri School of Journalism and the United States Marine Corps Officer Candidate School at Quantico, VA. He is the author of novels "The Skinning Tree" and "A Whisper For Help." As publisher of the Anderson County Review in Garnett, KS., he is a recipient of the Kansas Press Association's Boyd Community Service Award as well as more than 60 awards for excellence in news, editorial and photography.