MAXIMUS Loses Medicaid Contract after “Continued Failure” in Kansas

The Kansas Department of Health and Environment (KDHE) announced at the end of September that it will not renew its KanCare Clearinghouse contract with MAXIMUSto help administer the state’s Medicaid program. MAXIMUS’ term as the Clearinghouse contractor, which began in 2016, was marred by serious performance problems that led to substantial backlogs and some nursing homes halting acceptance of Medicaid-pending seniors.

In KDHE’s recommendation not to award the Clearinghouse contract to MAXIMUS, the agency noted “MAXIMUS’ continued failure to meet the base contract’s SLAs [service level agreements].”[1] According to KDHE:

As the State of Kansas’s current Clearinghouse contractor, MAXIMUS has had challenges meeting SLA’s throughout the life of their contract. MAXIMUS was issued a Complaint to Vendor early in 2018 that served as a formal notice of non-compliance with the agreed upon Performance Guarantees of the contract award document. Pursuant to this notice, MAXIMUS was required to submit a detailed corrective action plan. Prior to the complaint the State attempted on numerous occasions to find solutions to remedy performance deficiencies including staffing enhancements / augmentations and re-negotiations of SLAs throughout the contract.[2]

Kansas legislators on both sides of the political aisle joined advocates for the disabled and nursing homes in welcoming the news of KDHE severing its ties with MAXIMUS as the Clearinghouse administrator. Local media also applauded KDHE’s decision to boot MAXIMUS as the Clearinghouse administrator. “[P]oor service from those contracting with the state shouldn’t be tolerated,” stated the editorial board of The Hutchinson News, and called the decision to replace MAXIMUS “long overdue.”

The editorial board also suggested that MAXIMUS’ failures as the KanCare Clearinghouse administrator may have served as an obstacle to expanding Medicaid in Kansas by reducing the public’s trust in the program and supplying ammunition to those opposed to providing coverage for more Kansas residents.

MAXIMUS’ unacceptable performance operating the KanCare Clearinghouse was featured in our report, Maximum Harm: MAXIMUS’ Medicaid Management Failures. The report documents how MAXIMUS’ poor management of the Clearinghouse contract led to real harms for vulnerable Kansans, health providers, and the state’s health system.

The Kansas health secretary stated that MAXIMUS underbid and understaffed the KanCare contract, leading to “unacceptable” performance from the company. The backlog of Medicaid applications past the federal limit reached almost 11,000 under MAXIMUS, and seniors and nursing homes were particularly hard hit by the company’s contract failures.

State officials across the country should follow Kansas’ lead and hold contractors like MAXIMUS accountable for poor performance. The harms caused to Kansans by MAXIMUS’ Medicaid underperformance demonstrates the need for state officials to conduct rigorous responsibility and past performance reviews of bidders when making contract award decisions, in addition to the need for robust oversight and accountability measures post-contract award.

For more information on best practices in responsible contracting, visit the resources section of our website.

Endnotes

[1] Kansas Department of Health and Environment, “Contract Award Recommendation with the Evaluation of Technical Proposals Submitted Regarding EVT 0006858 Related to 2020 KanCare Eligibility Clearinghouse” (May 28, 2020). Document obtained via open records request.  

[2] Ibid.