Kansas lost approximately $88 million in estimated Quality Care Assessment revenues and interest, a performance audit by Kansas Medicaid Inspector General Steven D. Anderson revealed.
Quality Care Assessments are fees that skilled nursing facilities pay to the state for Medicaid reimbursement purposes. The assessments are also matched by federal funds.
"Continuing care" facilities provide different levels of care—from independent living to assisted living to skilled nursing care—in a single campus or location. Such facilities pay a lower Quality Care Assessment than ordinary nursing homes. The standard rate for Quality Care Assessments is $4,908 per bed. The reduced rate is $818 per bed.
"Because the Quality Care Assessments are much lower for continuing care facilities, there's obviously an incentive to be a continuing care facility," Anderson said. "However, lenient oversight allowed numerous nursing homes to qualify as continuing care facilities without sufficient evidence that they met the requirements for the reduced rate."
According to the performance audit, the Kansas Department of Insurance improperly issued continuing care provider certificates to numerous facilities that had not met the statutory requirements, costing the state millions in Quality Care Assessment revenue. The audit revealed that 68% of the Continuing Care Provider certifications between July 1, 2020, and August 31, 2023, were not in compliance with applicable state laws because the provider had not complied with statutory requirements such as an annual audit.
The report also showed that up to 24% of the Quality Care Assessments went to facilities that were not true continuing care providers in the first place yet were incorrectly assessed at the reduced rate. These facilities only appeared to provide one level of care and could not provide the required continuum of care.
Due to facilities paying the lower rate that were not true continuing care providers, over $33 million in State General Funds supplemented the lost revenue so the state could obtain the full amount of federal matching funds. These facilities also did not meet the statutory requirement of providing an annual audit report and are included in the estimated $88 million loss of revenue.
The audit report includes several findings and recommendations to improve oversight of the Continuing Care Provider registration process and if implemented should save Kansas millions annually.
The report was submitted to Kansas Attorney General Kris W. Kobach, Secretary of the Kansas Department for Aging and Disability Services Laura Howard, Kansas Commissioner of Insurance Vicki Schmidt, and members of Robert G. (Bob) Bethell Joint Committee on Home and Community Based Services and KanCare Oversight.
To report suspected fraud, waste, abuse or illegal acts involving Medicaid, MediKan or State Children's Health Insurance Program citizens may use an online form at https://ag.ks.gov/medicaid-ig or call 785-296-5050.