TOPEKA, Kan. (AP) — Kansas is asking for federal government help with putting private health insurers in charge of administering its entire Medicaid program, including efforts to provide health coverage for people with disabilities and elderly nursing home residents.

Kansas has asked the Centers for Medicaid & Medicaid Services (CMS), an arm of the U.S. Department of Health and Human Services (HHS) to waive some of the HHS rules that now apply to the state's $2.9 billion Medicaid program.

The move comes as some state legislators are arguing that Kansas Gov. Sam Brownback, R, is moving too quickly with the proposed Medicaid overhaul.

Medicaid is a program funded with a combination of state and federal money that pays for medical care for poor people, and for poor people and others who qualify for help with paying for nursing home care.

Brownback wants Kansas to hire three companies to manage the Kansas Medicaid program starting Jan. 1, 2013.
 
Kansas needs a waiver so that the state can include services for the disabled and elderly in the shift to managed care and build in financial incentives for improving services while controlling costs.
 
In the past, Kansas has not included disabled Medicaid enrollees or the elderly enrollees in a managed-care program.

Brownback administration officials said the changes will lead to better coordination of services for Medicaid participants with unusually high needs for services, eliminating duplication while improving their health.

Kansas wants to have the three contractors hired operate statewide, so participants can pick from a menu offering several different plans.

Some legislators in both parties say Brownback should move more slowly, to avoid administrative problems that could affect services, particularly for the disabled and elderly. But administration officials said the governor won't delay any changes.

"Why would we?" asked Lt. Gov. Jeff Colyer, R, a surgeon and former state senator who led the team that developed the overhaul plan. "We don't want to hurt Kansas patients."

Colyer added during an interview, "We want to make sure that they start getting the benefits now, and we're talking about tens of millions of dollars."

Legislators acknowledged that their role in the overhaul will be limited because most changes will be handled through the contracts. They must agree to a reorganization of the state's health and social services agencies, and they can weigh in on budget issues. Several said lawmakers also could set up an oversight committee.

Sen. Dick Kelsey, R-Goddard, Kan., said Brownback should delay the start of the Medicaid contracts for 6 months, until July 1, 2013.

"I don't believe that changes this massive can be made in this time frame successfully," Kelsey said. "It will be a tremendously chaotic thing."

HHS — a department led by Secretary Kathleen Sebelius, a former Democratic governor of Kansas — could also be an obstacle

Kansas is asking CMS for a waiver of specific rules so Brownback can start the new contracts next year, and the state also is asking CMS for a "global" waiver, to give Kansas an even freer hand later. Brownback spokeswoman Sherriene Jones-Sontag acknowledged the broader part of the request is "breaking new ground," but she said the first part is not unusual.

"We are confident we will obtain the waiver authority we need," she said.

State medical programs provide services for an average of 380,000 people a month, and the bulk already receive state health coverage through private contractors. By bringing the disabled and elderly into a managed-care system, the state would add Kansans who need relatively expensive, long-term services.

Robert Moser, the state's secretary of health and environment, said Kansas hasn't tried including disabled and elderly enrollees in managed care programs previously, in part because the state wasn't sure private health insurance companies wanted to take on the coverage. Now, he said, multiple companies are willing to compete.

Up to 15 companies can bid for the Kansas contracts, including Aetna Inc., Hartford (NYSE:AET); UnitedHealth Group Inc., Minnetonka, Minn. (NYSE:UNH); WellPoint Inc., Indianapolis (NYSE:WLP);  and Blue Cross and Blue Shield of Kansas, Topeka, Kan., Kansas' largest health insurer. Bidders have until Tuesday to submit the technical details of their proposals to the state, then until Feb. 22 to submit the rest.

Brownback's administration has promised the new contracts will require companies to work through existing service providers.

Moser predicted that private companies' expertise and resources will help Medicaid participants who haven't previously been in a managed care program.

"They've got more likelihood of seeing improved health care outcomes and more benefits," Moser said after briefing the Kansas House Health and Human Services Committee on the overhaul effort.

If the state delays the overhaul, Colyer said, "It will cost us millions of dollars, and it's a worse health outcome."

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