By Jim McLean, KHI News Service, February 16, 2011
TOPEKA — Kansas is getting a $31.5 million federal grant to design the backbone technology needed to operate the insurance purchasing exchange it must establish to comply with the federal health reform law.
A U.S. Department of Health and Human Services official who asked not to be named because the official announcement of the award will come later today, confirmed late Tuesday that Kansas is among seven states receiving "early innovator" grants.
Maryland, New York, Oklahoma, Oregon, Wisconsin and a consortium led by Massachusetts are the others.
The agency has scheduled a formal announcement for 1 p.m. this afternoon.
"I think it will shine a very nice light on Kansas in terms of our capacity to create the IT (information technology) infrastructure that’s needed to run these exchanges," said Kansas Insurance Commissioner Sandy Praeger after learning Kansas was in the running.
The reform law requires that the purchasing exchange be up and running by 2014. Kansans will use the Web-based exchange to purchase private health plans that meet federal coverage requirements, which are still being developed.
The Kansas Insurance Department originally requested $21 million but that figure was increased during negotiations with HHS in order to cover the anticipated costs of completing a new Medicaid enrollment system being developed by the Kansas Health Policy Authority and adapting it to work with the purchasing exchange.
The Medicaid eligibility system, known as KMED, is being developed using a $40 million grant awarded in 2009 by another federal agency, the Health Resources and Services Administration.
Last minute hurdles
Last week, HHS asked Insurance Commissioner Sandy Praeger to obtain assurances from Gov. Sam Brownback, who opposes the reform law, that Kansas would proceed with its exchange planning and that she would administer the grant, if it were awarded.
Brownback provided Praeger with a letter Friday that she shared with HHS officials. It said he would allow implementation of the Affordable Care Act to proceed pending a decision by the U.S. Supreme Court on the law’s constitutionality and that the insurance department would be in charge of administering the innovation grant and two previous ones.
The HHS official who confirmed Kansas’ selection said states receiving early innovator grants were in an "advanced state of readiness" to use the money for developing new Medicaid enrollment systems and to adapt them for use in the exchanges. The systems would be used, in part, to determine who among the millions of people expected to purchase health insurance through the exchanges are eligible for federal subsidies.
Kansans with incomes between 100 percent and 400 percent of the federal poverty level — $22,050 to $88,200 for a family of four — will be eligible on a sliding scale for federal subsidies to help them purchase private insurance through the exchange and pay for costs not covered by their plans. More than half of Kansans are thought to live in families that would be eligible for some level of subsidy.
Hire an IT consultant
Linda Sheppard of the Kansas Insurance Department said late Tuesday the department had not been officially notified it would receive the grant. But if the money is awarded, she said it would initially be used to hire an IT consultant to guide the process of adapting the Medicaid enrollment system to the needs of the exchange.
"Kansas did have an advantage in the fact that KHPA had already started to work on that new eligibility system because this would not have been possible with the system that we’ve had in place in Kansas for some period of time," Sheppard said.
Praeger said "early innovator" states are supposed to serve as models for others. She said it’s possible other states would decide to pay to use the Kansas’ system to operate their own exchanges.
"If other states decided to buy into our system, they would still operate their own exchange with their own rules, they would just use our technology," she said.
(Cathy McNorton helped collect information for this report.)