Archive for Wednesday, April 29, 2015

KanCare providers lose millions for 2nd straight year

April 29, 2015

— The three companies that provide coverage to Kansas' Medicaid system lost a total of $52 million doing so last year, marking a second straight year of losses, according to records reviewed by a legislative committee.

The 2014 loss by Amerigroup, Sunflower Health Plan and UnitedHealthcare was less than half the $116 million that they collectively lost in 2013 while providing coverage under KanCare, which was created when the state privatized its Medicaid services in 2013, The Topeka Capital-Journal reported.

UnitedHealthcare fared the best last year with $1.5 million in losses, while Amerigroup lost $16 million and Sunflower lost about $35 million, according to figures presented Tuesday to the Legislative Oversight Committee.

Mike Randol, the health care finance director for the state Department of Health and Environment, said the information came from filings the companies are required to make with the Kansas Insurance Department.

UnitedHealthcare recorded total revenues of about $818 million, while Sunflower had $1.03 billion in revenue and Amerigroup had $900 million in revenue.

After the committee meeting Tuesday, Tim Spilker, CEO of UnitedHealthcare Community Plan of Kansas, declined to predict whether the company would make a profit this year.

"It's early, right, in 2015. It's kind of like your own personal budget — you never plan to lose money. So we actually feel really good about the progress we're making in terms of clinical programs and member engagement," Spilker said.

Each of the three companies signed three-year contracts in 2013 with the option of two one-year extensions.

Rep. Jim Ward, D-Wichita, said the companies have subsidized health care in Kansas by absorbing the $170 million in losses in the last two years.

"They're not altruistic. They're in this to make money. So at some point in time, do they make different business decisions?" said Ward, who worried that patients' lives could be disrupted if the companies pull out of KanCare.

But Rep. Willie Dove, R-Bonner Springs, said the companies anticipated losing money for the first three years.

"In order to make things work, there is an expected loss of revenue because you're taking in individuals who in many cases have not had proper health care coverage, so there's an expected loss (for the first three years)," Dove said.

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