The Kansas Medicaid program, KanCare, is a jointly funded state and federal government program that provides health coverage to qualifying individuals. States can choose how to administer their own Medicaid program within federal guidelines, creating programs that vary from state to state. To allow this flexibility, the federal government offers waivers that allow states to waive certain provisions of the Medicaid statutes related to state program design. Kansas is currently approved for two waivers: a section 1115 waiver for KanCare and a section 1915(c) waiver for home and community based services.
KanCare – Section 1115 Waiver
In 2013, Kansas shifted from a state-operated program to KanCare, in which managed care organizations (MCOs) provide services. As part of creating KanCare, Kansas successfully applied for a section 1115 demonstration waiver and has operated under a 1115 waiver since 2013, renewing it once in January of 2019. Generally, section 1115 demonstrations are approved for an initial five-year period and can be extended for up to an additional three to five years, depending on the populations served. States commonly request and receive additional five-year extension approvals.
The current 1115 waiver for Kansas is set to expire in December 2023. As a result, the State has submitted an application to obtain a new source of authority to continue implementation of its managed care delivery system. On December 27, 2022, the Kansas Department of Heath and Environment (KDHE) submitted a request for a five-year renewal of the KanCare section 1115 demonstration for January 1, 2024, through December 31, 2028. This application included an amendment to transition features of the KanCare program that do not require expenditure authority to more permanent federal authorities such as state plan amendments and a section 1915(b) waiver. Below is a description of each of the waivers that will likely be used to continue KanCare beyond December 31, 2023, and some of the considerations for each:
- 1115 Waiver Renewal –The 1115 waiver requires budget neutrality or a limit on the amount of federal dollars that can be spent. This cap on federal spending may limit the State’s ability to address certain initiatives such as reducing the waitlists for Home and Community Based Services waivers and increasing provider reimbursement rates;
- 1915(b) Waiver – This type of waiver is initially granted for a two-year period and allows states to provide services through a managed care plan. While this waiver does not have a budget neutrality cap, states must demonstrate that their managed care system is cost-effective. This waiver allows states to require that all state plan populations enroll in managed care, including dual eligibles (individuals who receive both Medicare and Medicaid benefits) and children with special health care needs; and
- State Plan Amendment – States can permanently implement a managed care delivery system by getting a state plan amendment approved by the Centers for Medicare and Medicaid Services (CMS). State Plan amendments do not need to be renewed but do place some limits on the populations a state can require to enroll in managed care. For example, State Plan amendments do not allow states to require dual eligibles and children with special healthcare needs to enroll in a managed care program.
All three of these authorities allow states to be exempt from certain requirements of Medicaid. For example, they each allow states to implement managed care in only some areas of the state and allow states to require people to receive their Medicaid services from a managed care plan. Regardless of the type of authority, however, states are required to comply with other federal guidelines around managed care, including reasonable access to providers and the right to change managed care plans.
KanCare Managed Care Contracts
Kansas currently contracts with three MCOs – Aetna, Sunflower Health Plan, and United Healthcare – to provide Medicaid services under KanCare. These contracts outline the relationship between the State and the MCOs and establish the State’s expectations and priorities. The current contracts between each of the MCOs and the State began in January 2019 and will expire on December 31, 2024.
The MCO contracts are not tied to the federal authority the State uses to operate KanCare. In January 2024, Kansas will shift to a new waiver or federal authority while the MCO contracts remain in place through the end of 2024.
Differences Between the 1115 Waiver and MCO Contracts
| 1115 Waiver | MCO Contracts |
| Governs the State’s relationship with the federal government | Governs the MCOs’ relationship with the State |
| Focuses on the State’s authority to draw down federal funds, requires reports, and other issues | Focuses on the day-to-day relationships between the MCOs, providers, and beneficiaries |
| Does not directly affect providers and beneficiaries | Directly affects providers and beneficiaries |
New MCO Contracts
Kansas issued a new solicitation for MCO contractors for KanCare via a Request for Proposal (RFP) on October 2, 2023. The Department of Administration’s Office of Procurement and Contracts will oversee the negotiated procurement process that will ultimately result in new MCO contracts. This process enables agencies to consider several factors in the evaluation of bid responses, including cost, vendor qualifications, past performance, and methodology. The evaluation of proposals is performed by a three-person Procurement Negotiating Committee (PNC), as defined in KSA 75-37,102. The PNC will examine both the technical and cost proposals and, once the bids have been fully examined, will provide award recommendations to the Director of Purchases. The timeline, as proposed by the Department of Administration, is below:
KanCare RFP Timeline
| Activity | Timeline |
| Release RFP | October 2, 2023 |
| Mandatory RFP pre-bid conferences | October 16, 2023 |
| RFP questions and answers and posting of responses | October 23 to November 28, 2023 |
| Stakeholder engagement report-out | October 24 to October 26, 2023 |
| Evaluator training | December 18 to December 19, 2023 |
| RFP bid closing date/proposals due | January 4, 2024 |
| RFP evaluation process | January 5 to March 21, 2024 |
| Negotiations, contract award, and contract signing | March 22 to April 12, 2024 |
| Bid protest period | April 15 to May 17, 2024 |
| Implementation and readiness review | May 20 to December 31, 2024 |
| New contracts go live | January 1, 2025 |
by Megan Leopold
Managing Fiscal Analyst
785-296-4419