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As she awaits confirmation as U.S. secretary or health and human services, Kansas Gov. Kathleen Sebelius is facing allegations of favoritism by her administration in distributing Medicaid dollars.
Republican legislators in Kansas said Wednesday they will have hearings into a decision by one of the Democratic governor's top appointees to increase Medicaid payments by $713,000 a year to a suburban Kansas City group providing services to the developmentally disabled.
One of the group's board members is Larry Gates, the Kansas Democratic Party's chairman. Another board member is Lew Perkins, University of Kansas athletic director, whose chief of staff was formerly Sebelius' chief spokeswoman.
Dan Biles, a former Gates law partner, served on the board until the end of 2008. In January, Sebelius appointed him to the Kansas Supreme Court.
Sebelius acknowledged that she'd been briefed by Don Jordan, her secretary of social and rehabilitation services, before he made the decision, but she said, "I was not involved."
The decision came as the state struggles with serious budget problems and other groups serving the disabled worried they may lose state dollars. There's also a dispute over whether Jordan followed proper procedures.
"It has an odor about it," said House Speaker Mike O'Neal, a Hutchinson Republican.
Sebelius would oversee Medicaid as health and human services secretary. Nominated by President Barack Obama on Monday, she plans to resign as governor if the U.S. Senate confirms her.
In response to the controversy, Jordan was seeking an audit by another state health care agency. A Democratic lawmaker said he hoped the move would delay legislative hearings but said a review was "exactly what needs to happen."
"There are just a lot of issues swirling," said Senate Minority Leader Anthony Hensley, a Topeka Democrat and a Sebelius ally. "Anytime you have these kinds of accusations of favoritism and cronyism, it's serious."
Jordan made the decision in October, after months of appeals by Community Living Opportunities, of Lenexa, which serves the developmentally disabled.
Gates said he never talked to Sebelius about Community Living's funding issues, even after Jordan made his decision. Gates also said the questions about Jordan's decision are being raised by competing providers.
"It's exactly a bureaucratic turf war," Gates said. "I still believe it's not much of a story."
As she awaits confirmation as U.S. secretary or health and human services, Kansas Gov. Kathleen Sebelius is facing allegations of favoritism by her administration in distributing Medicaid dollars. Republican legislators in Kansas said Wednesday they will have hearings into a decision by one of the Democratic governor's top appointees to increase Medicaid payments by $713,000 a year to a suburban Kansas City group providing services to the developmentally disabled. One of the group's board members is Larry Gates, the Kansas Democratic Party's chairman. Another board member is Lew Perkins, University of Kansas athletic director, whose chief of staff was formerly Sebelius' chief spokeswoman. Dan Biles, a former Gates law partner, served on the board until the end of 2008. In January, Sebelius appointed him to the Kansas Supreme Court. Sebelius acknowledged that she'd been briefed by Don Jordan, her secretary of social and rehabilitation services, before he made the decision, but she said, "I was not involved." The decision came as the state struggles with serious budget problems and other groups serving the disabled worried they may lose state dollars. There's also a dispute over whether Jordan followed proper procedures. "It has an odor about it," said House Speaker Mike O'Neal, a Hutchinson Republican. Sebelius would oversee Medicaid as health and human services secretary. Nominated by President Barack Obama on Monday, she plans to resign as governor if the U.S. Senate confirms her. In response to the controversy, Jordan was seeking an audit by another state health care agency. A Democratic lawmaker said he hoped the move would delay legislative hearings but said a review was "exactly what needs to happen." "There are just a lot of issues swirling," said Senate Minority Leader Anthony Hensley, a Topeka Democrat and a Sebelius ally. "Anytime you have these kinds of accusations of favoritism and cronyism, it's serious." Jordan made the decision in October, after months of appeals by Community Living Opportunities, of Lenexa, which serves the developmentally disabled. Gates said he never talked to Sebelius about Community Living's funding issues, even after Jordan made his decision. Gates also said the questions about Jordan's decision are being raised by competing providers. "It's exactly a bureaucratic turf war," Gates said. "I still believe it's not much of a story." Jordan's decision has been strongly criticized by Interhab, a group that represents some service providers, but not Community Living. Tom Laing, Interhab's executive director, said Jordan's decision represents a misuse of Medicaid funds. "The entire system for people with disabilities is underfunded," Laing said. "To then see apparently influential people be able to serve the needs of their organization is a slap in the face of every other organization." In a Nov. 6 e-mail that he provided to The Associated Press, Laing wrote to Jordan: "Have you lost your mind? My freeking phone is ringing off the wall." Gates said Community Living has funding issues because its serves severely disabled adults, who become more expensive to care for as they age. State documents show that Community Living's latest push for additional money from the Department of Social and Rehabilitation Services began in September 2007. The documents were obtained by Interhab through a Kansas Open Records Act request and provided to AP. Community Living's chief executive officer wrote a letter to Jordan dated July 1, 2008. On the same day, Gates e-mailed Troy Findley, Sebelius' chief of staff, noting a "high level of frustration." Records show Jordan was drafting a letter that didn't hold out much promise of additional funds as he and Findley e-mailed each other about meeting with Gates. In a Sept. 10 e-mail, after Jordan had asked Findley to review a draft of the letter, Findley wrote, "Hold off on this for now ..." Jordan said he had several conversations with Gates about funding issues. His staff later determined that 43 of Community Living's clients were severely disabled enough that the group should be paid at higher rates. "Pretty much a done deal," he wrote Findley in an Oct. 24 e-mail. "They are very happy folks." Sebelius said Wednesday that people who question whether the governor's office should refer people with issues to various agencies "don't understand the way state government operates." "Those requests often come to the governor's office. They are directed to the appropriate department," she said. "That contact is often five, six, seven times a day." But Laing said 27 regional groups under contract with the state act as gatekeepers usually determine which services warrant the higher rates. He said SRS didn't follow its own policies in giving the extra money to Community Living. Jordan disagreed, saying the result would have been the same for Community Living. Gates said the group always has gone directly to SRS because some of the gatekeepers are its competitors. The chairwomen of the House and Senate budget subcommittees on social services spending said they'll have hearings but haven't set a date. They also said they may ask for a legislative audit. "We need to make sure that everybody is being treated fairly and equitably," said Senate subcommittee Chairwoman Carolyn McGinn, a Sedgwick Republican. ___ On the Net: Department of Social and Rehabilitation Services: http://www.srskansas.org/ Governor's office: http://www.governor.ks.gov Interhab: http://interhab.org/cms/ Community Living Opportunities: http://www.clokansas.org/ Kansas legislature: http://www.kslegislature.org
