Iowa lawmaker unleashes criticism on governor’s plan to privatize Medicaid

DES MOINES – Governor Terry Branstad’s initiative to privatize Medicaid was met with fierce and stinging criticism Wednesday from an Iowa lawmaker.

The Iowa Department of Human Services (DHS) has awarded contracts to four bidders for Governor Branstad’s Medicaid Modernization initiative.
The bidders announced in August include:
– Amerigroup Iowa, Inc.
– AmeriHealth Caritas Iowa, Inc.
– UnitedHealthcare Plan of the River Valley, Inc.
– WellCare of Iowa, Inc.

A Request for Proposals for the Iowa High Quality Health Care Initiative was issued February 16, 2015. The state received 11 bids from potential vendors, with one withdrawing, as it moves toward a risk-based managed care approach for Iowa’s Medicaid program, which serves about 560,000 Iowans.

Branstad’s modernization initiative aims to:
– Improve quality and access through better coordinated care
– Promote accountability for outcomes
– Create a more predictable and sustainable Medicaid budget

“This patient-centered approach will mean that Medicaid members get the right care, at the right time, and in the right setting,” said DHS Director Charles M. Palmer. “That will lead to a healthier Medicaid population, and that’s good news for members and Iowa taxpayers who make this program possible.”

The cost of delivering Medicaid has grown 73 percent since 2003 at more than $4.2 billion in the last fiscal year, including $1.39 billion in state general fund taxpayer dollars. The Iowa High Quality Health Care Initiative allows the state to hire modern health plans to coordinate care and manage spending. Moving to a managed care approach and capitated rate allows the state to achieve the goal of a more stable budget.

“These companies have demonstrated that they can manage Iowans’ care so they’ll be connected with the services they need to help them lead healthier lives,” said Palmer. “Starting January 1, these experienced MCOs are positioned to help us achieve savings at a time when there is an ever-growing demand on our state’s medical assistance program.”

This new approach for the Medicaid program will be called the IA Health Link. With the announcement of awards, DHS will launch a targeted communications campaign with Medicaid members, stakeholder organizations, providers, and other interested audiences about upcoming enrollment and program activities.

“We’ll keep Iowans informed about their choices and how this patient-centered approach can help improve the overall health of the member,” Palmer said. “Through the IA Health Link program, we’ll improve the coordination of care for Iowans who receive health care assistance and provide greater predictability in Medicaid spending for all Iowa taxpayers.”

“Yesterday, I attended pitiable presentations from the 4 out-of-state profit-making managed care companies chosen to administer Iowa’s Medicaid program,” Anderson said. “It was painfully clear that getting this new system effectively up and running EFFECTIVELY by January 1 is a pipe-dream and the Governor should drop the plan or extend implementation another six months to a year.

“During painful Q&A sessions, the most common answers were: I don’t know; I’ll have to ask our administrator; or the State DHS hasn’t told us yet or is working on that. Approval for the privatization of Medicaid plan has not yet been granted by the Feds. The companies don’t have their payment schedule, procedures, or service provider handbooks developed or reviewed by DHS yet, but are compelling providers to sign contracts now without that information. And the four companies have not, and may not, coordinate so they use the same billing requirements, treatment objectives, and pre-authorization requirements. The program transition is NOT ready for implementation within the next 3 months!

“One in five Iowans – 560,000 people — rely on Medicaid for their health coverage because they are elderly, disabled, or poor. 80% of Medicaid clients are children, However, roughly 80% of Medicaid spending is for the elderly. The elderly, disables, and poor is NOT served by this fast track change to Medicaid. Iowa is better than this.”