Kansas returning $31.5 million in grant money

Kansas Gov. Sam Brownback and Lt. Gov. Jeff Colyer announced Tuesday that Kansas will return the early innovation grant it received in February from HHS to implement a state health insurance exchange.

An HHS official said the agency has not received a formal letter about Kansas returning the $31.5 million it had been granted, but rather learned of the decision in a news release from the governor's office.

Kansas was one of seven states to receive funding from HHS earlier this year to set up the information technology infrastructure needed for an exchange. Oklahoma rejected its award of more than $54 million earlier this year. Meanwhile, HHS' grants office has not received word about the approximately $450,000 that Kansas has already drawn down from the grant, the HHS official said.

“We are disappointed that Kansas has given up an opportunity to be a leader in the development of technology for state exchanges, which could have benefited the citizens of Kansas as well those in other parts of the country,” said an official statement from HHS sent via e-mail.

Meanwhile, Brownback, a Republican, cited the current financial troubles in Washington as a reason for returning the money.

“There is much uncertainty surrounding the ability of the federal government to meet its already budgeted future spending obligations,” Brownback said in the release. “Every state should be preparing for fewer resources, not more. To deal with that reality, Kansas needs to maintain maximum flexibility,” he added. “That requires freeing Kansas from the strings attached to the ‘Early Innovator' grant.”

Colyer added that federal Medicaid mandates have cost Kansas more than $400 million in the last two years, and that “full implementation of the mandates in the president's healthcare law would cost billions more.”