Kansas inspector general digs into KanCare provider organizations

Kansas inspector general Steven Anderson, who spoke on Oct. 21, 2025, to the Senate Committee on Government Efficiency, earned expanded authority from the 2025 Legislature to scrutinize public health, food and cash assistance programs. (Kansas Reflector screen capture of Kansas Legislature video)

TOPEKA — The first audit under expanded powers from the Kansas inspector general’s office identified more than a dozen problems within organizations providing health care through Kansas’ Medicaid program.

The audit is just the beginning of a campaign to weed out fraud and inefficiencies within social welfare programs, following the 2025 Legislature’s approval of broadening the office’s authority to encompass oversight of cash, food and health assistance.

Steven Anderson, the state inspector general, presented 17 findings with accompanying recommendations based on hospital complaints about delays, discrepancies and a potential conflict of interest. He spoke to the Senate Committee on Government Efficiency at an Oct. 21 hearing. 

The audit analyzed hospital complaints from 2023 to determine whether organizations prolonged reviews, manipulated patient statuses and lacked consistency in determining post-visit levels of care. The audit also identified a potential conflict of interest within United Healthcare, one of three managed care organizations that have offered services under KanCare, as Medicaid is known in Kansas.

The inspector general’s office, which is housed within the Kansas Attorney General’s Office, interviewed staff at six Kansas hospitals, representatives from the three KanCare managed care organizations at the time of the report, staff from the Kansas Department of Health and Environment, and representatives from the Kansas Hospital Association. KDHE agreed with most, but not all, of the audit’s recommendations.

The audit found that managed care organizations refused to reimburse claims that involved returns to a hospital within 30 days of the initial visit, even if the visits were unrelated.

The hospitals typically eat those costs, Anderson said.

“It’s probably incalculable how much money is lost through all this,” said Sen. Mike Thompson, a Shawnee Republican.

The percentage of denied claims for hospital services across the organizations averaged 6% in 2023. However, the value of hospital service claim denials makes up a disproportionate amount of all denials.

One organization denied $1.8 billion in claims in 2023. Hospital claim denials made up 70%, or $1.3 billion, of those denials. Another denied $1.02 billion in claims, and hospital denials accounted for 69%, or $707 million. The third organization denied $1.8 billion in claims, and hospital denials accounted for 62% or $1.1 million.

Anderson said the amounts have grown larger every year.

“The reality is, if I’m going to deny claims, I’m going to look for the higher-dollar ones,” he said. “We can draw some conclusions, maybe, that they were approving the smaller-dollar ones, but the big money ones were oftentimes denied.”

The audit also found that United Healthcare used its proprietary health care criteria and billing system to judge its own claims.

“So they own the process from front to back,” Anderson said.

He said the organization “controls so much of the narrative,” and United Healthcare’s use of a system owned by one of its subsidiaries “looks bad on the surface.”

However, he acknowledged his office cannot prove United Healthcare uses its system inappropriately. KDHE said in a response in the audit that state Medicaid programs must follow certain conflict of interest provisions, “but to date, United acquiring billing and other health care companies and continuing to use those products is not a conflict per the current standards.”

The tools were used by all three contracted organizations at the time, KDHE said. Trying to restrict United Healthcare’s use of the systems and allowing other organizations to continue would create “additional dynamics.”

“These tools are widely used and accepted by healthcare providers across the nation to make medical decisions and validate claims,” KDHE said.

A spokesperson for the company said in an emailed statement: “We remain committed to transparency and accountability and will address these recommendations with our state partners, including clarifying that Change Healthcare is a division of Optum. UnitedHealthcare and Optum are separate entities and subsidiary businesses of UnitedHealth Group, which maintains strict governance policies and compliance standards to ensure that each subsidiary operates independently and in the best interest of its clients and members.”

Anderson said his office, the managed care organizations and KDHE are scheduling a meeting to discuss the audit’s findings.

“I’m thrilled to hear that,” said Sen. Renee Erickson, a Wichita Republican and chairwoman of the committee.

The best solution, she said, is to get stakeholders together to sort out their differences.

“I always say, if you want the Legislature to do it, no one’s going to be happy with that fix,” she said, “so I’d rather the entities get together and work it out.”

Ultimately, the audit poses the question of whether the state’s contracts reflect what Kansans need, Erickson said.

Upcoming audits span government assistance programs, according to Anderson. One examines data sharing between the state agencies that oversee KanCare and the Supplemental Nutrition Assistance Program to verify eligibility for those programs based on comparing residency, household composition and income reporting. Anderson promoted another audit that will look at what he called the pregnant women program to identify whether those accessing it qualify.

The state facilitates the Special Supplemental Nutritional Assistance Program for Women, Infants and Children, often called WIC, which would fall under Anderson’s purview.

He said his office also plans to release audits of Kansas’ waiver programs, which assist elderly and disabled Kansans through Medicaid, and the pharmaceutical drug program, which is also operated through Medicaid.

Sen. Michael Murphy, a Republican from Sylvia in Reno County, commended Anderson’s work.

“I’m a simple guy,” Murphy said, “and I think when you find you have a hole in the fence, you shouldn’t be surprised when the cows get out.”

This story has been updated to include a statement from United Healthcare.