House Republicans Take On Privatized Medicaid; Senate Balks at the Cost

Apr 5, 2018

A bill that aims to correct some of the problems in Iowa’s privatized Medicaid system advanced in the Republican-controlled Iowa House this week.  

The bill comes as complaints continue from patients not getting services and providers not getting paid. 

A House committee approved HF2483 on Tuesday, one day after the state ombudsman released a scathing report on the privatized program, including services for the elderly and disabled.

"This is our second chance to revive the managed care provisions and hopefully get this to the governor's desk," said Rep. David Heaton (R-Mount Pleasant).

"It's important that we do something." -Sen. Mark Costello

Under the bill, the Department of Human Services will review any case where one of the private companies known as a managed care organization cuts back care for patients receiving long-term services and support.     

Also, DHS will step in if a patient wins an appeal.  

“Any time there is an appeal and our client prevails, the decision on the services continued will rely with the department and not with the MCO,” Heaton said. “I think we need to make sure that we have covered that.”

Under the bill the private companies must comply with deadlines in their contracts for paying providers or explain why.  An independent auditor will randomly review the payments.   

Also, the companies would have 30 days to reprocess a claim where an error occurred.

In addition, the DHS will review the process of prior authorizations.   That’s the approval an MCO gives before a provider can offer a service.     

The House Appropriations Committee approved the bill unanimously.

I was certainly hoping for something stronger. -Rep. Lisa Heddons

A leading Democrat on Medicaid issues expressed limited expectations for the bill.

“I was certainly hoping for something stronger to come out of this committee,” said Rep. Lisa Heddons (D-Ames.)   “I know this is a starting spot and I hope we can continue to work on all the problems that are part of the managed care companies.”

The issue was revived in the Appropriations Committee after an earlier version of the bill HF 2462 stalled in the Senate.   

Sen. Mark Costello (R-Imogen) cited several concerns about HF2462.

“The cost was our biggest one honestly,” Costello said. “They've addressed that a fair bit.

The non-partisan Legislative Services Agency estimated the price tag of HF2462 at $4.7 million.  The revised bill HF2483 saves money by reducing the number of payments to providers the independent auditor would review.

With time running out for action this legislative session, Rep. Pat Grassley (R-New Hartford) authored the revised bill as Chair of the House Appropriations Committee. Bills in that committee are exempt from self-imposed deadlines for action.

“We made it very clear when session started that we wanted to go in and recognize issues we had with the MCO's,” Grassley said.   

"It's important that we do something," Costello added. 

The bill goes next to the full House for debate.