Kansas Gov. Sam Brownback's efforts to overhaul Medicaid hit a rough spot Thursday after the state's largest health insurance company decided not to bid on a contract to help manage the program, leaving some lawmakers and advocates increasingly uneasy.

Officials with Blue Cross and Blue Shield of Kansas Inc. said submitting a bid for a state contract would require the company to make dramatic business changes in less than a year. Brownback's administration plans to issue three contracts this year for the state's $2.9 billion program, which provides healthcoverage to poor families and disabled and elderly Kansans. The contracts would start Jan. 1, 2013.

Kansas has asked the federal government, which helps finance Medicaid, to waive some of its rules so that the contracts can cover the disabled and elderly and include financial incentives for improving services while controlling costs. Critics worry Brownback's administration is moving too quickly.