An audit released by Kansas’ attorney general revealed that the state is losing over $20 million annually due to inadequate oversight by the Insurance Department. However, the department disputed the audit’s findings, claiming it should be largely disregarded. The conflict between Attorney General Kris Kobach and Insurance Commissioner Vicki Schmidt, both Republicans, arises as they are potential candidates in the 2026 gubernatorial race. The audit highlighted that the Insurance Department allowed numerous nursing homes to claim significant tax breaks improperly, resulting in a loss of more than $94 million in revenues between July 2020 and August 2023.
Schmidt’s office refuted the audit’s findings, criticizing the inspector general’s interpretation of state law as overly harsh and unreasonable. The department argued that the conclusion that most applications for the tax break were mishandled does not align with reality. The state imposes a per-bed tax on many skilled nursing facilities for Medicaid, but exemptions are available for nursing homes meeting specific criteria. The audit emphasized the lack of proper procedures being followed by the Insurance Department in granting certificates to nursing homes for tax breaks.
According to the inspector general’s audit, the Insurance Department issued certificates to nursing homes without complete records, particularly lacking annual audits. In response, the Department defended its actions by stating that the homes were indeed being audited, and criticized the inspector general for demanding audits to be completed at an unreasonable pace. Spokesperson Kyle Stratham highlighted the potential negative impact on Kansas businesses if the department were to accept the inspector general’s conclusions, stating that additional taxes would significantly impact the availability of care for senior Kansans.
The conflict between Kobach and Schmidt adds a political dimension to the audit’s findings, as both are potential gubernatorial candidates in 2026. The GOP-controlled state Senate recently approved a bill that would grant more power to Kobach’s office in investigating social services fraud, further exacerbating tensions between the two officials. The discrepancies between the audit’s findings and the Insurance Department’s response point to a broader issue of accountability and oversight within the state government, with potential implications for Medicaid funding and services for vulnerable populations.
Despite the Insurance Department’s dismissal of the audit’s conclusions, the discrepancies highlighted raise concerns about the state’s ability to effectively manage Medicaid funding and ensure proper oversight of tax breaks for nursing homes. The controversy surrounding the audit underscores the political complexities inherent in government oversight and accountability processes, particularly in an election year. The ultimate impact of this dispute on Kansas’ Medicaid program and the provision of care to vulnerable populations remains to be seen, as the conflicting interpretations of state law and audit findings continue to unfold.
