KS Attorney General: $142 million could be coming back to Kansas

Published: Aug. 22, 2018 at 11:02 AM CDT
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The Kansas Attorney General's Office says $142 million could be coming back to Kansas after a federal judge rules a certain Affordable Care Act fee was taken from Kansas illegally.

The fee, called the Health Insurance Provider Fee, is one part of the Affordable Care Act enacted under President Barack Obama. The federal government imposed the HIPF on medical providers but states were exempt.

Kansas, being a state that contracts with private managed care organizations to operate Medicaid programs, was hit with the fee. The reason, Kansas Attorney General Derek Schmidt says, is the federal government imposed the fee on the private care organizations, then adopted a regulation requiring the organizations to pass the cost to the state.

Schmidt said the federal government was collecting the money illegally. Kansas, along with Indiana, Texas, Louisiana, Nebraska and Wisconsin filed a lawsuit claiming this fee was an issue back in 2016.

“The whole scheme was a two-step sleight-of-hand that had the effect of forcing states like Kansas to tax its citizens and then send the proceeds to the federal government,” Schmidt said through an emailed news release. “We’ve thought from the beginning this was one of the illegal provisions of Obamacare, and yesterday the federal court agreed.”

Yesterday, Federal District Judge Reed O'Connor ordered the government return $839 million to states. Kansas' share is $142 million. Schmidt says that figure comes from money collected between 2013-2015.

Schmidt says the ruling is likely to be appealed.

“This lawsuit is ongoing,” Schmidt said in an emailed news release. “Kansas budgeters should not bank on this money just yet. But yesterday’s ruling is well-reasoned and puts us in a much stronger position as our case goes up on appeal.”