The state of Kansas' largest insurance company has decided it doesn't want to participate in Gov. Sam Brownback's plan to move Medicaid patients into privatized managed-care programs.

In a letter addressed “Dear provider,” Angie Strecker, director of institutional relations for Blue Cross Blue Shield of Kansas, said the insurer “has decided not to submit a proposal to the state to be a Medicaid contractor.”

State Rep. Jim Ward, a Wichita Democrat, said it brings into question the financial feasibility of the governor’s plan to shift the care of poor and disabled Kansans to private health maintenance organizations.

On Wednesday, Ward introduced a bill that would require annual audits to ensure that privatization doesn’t lead to reductions in benefits for Medicaid recipients.

Blue Cross, a mutual insurance company owned by its customers, covers 880,000 Kansans. In 2010, the company processed more than 16 million claims worth more than $2 billion.

The letter said Blue Cross had devoted significant staff and resources to analyzing the state’s request for proposals.

“In the end, although we believe the RFP may present a sizeable opportunity it would have required us to dramatically change our business model to serve new populations in different settings in less than a year,” Strecker wrote. “We decided that we could not responsibly commit to so great a change at this time.”

Brownback has made Medicaid privatization a centerpiece of his plans for reforming state government.

The administration last week applied to the federal government for a waiver to change the state’s system. Under the governor’s plan, everyone who receives health care through Medicaid would be moved into a private managed-care program in an effort to reduce costs while avoiding reductions in services.

The change would affect about 350,000 Kansans and $2.8 billion of state spending.

To read more, visit www.kansascity.com.