TOPEKA, Kan. (AP) — Kansas plans to continue its contract with a business that processes Medicaid applications despite complaints about its performance — and will pay the business more while taking over some if its duties, a state official told lawmakers.

The Kansas Department of Health and Environment will extend its contract with Maximus beyond the end of the year and will not sue the company for failing to meet its obligations under the current contract, agency Secretary Jeff Andersen said Tuesday. Maximus will provide $10 million to the state in "concessions," he said.

Maximus was hired in...