Path Unclear for Iowa's Medicaid Privatization

Dec 8, 2015

The Department of Human Services says it is not sure exactly how many of the nearly 30,000 Medicaid providers in Iowa have signed with at least one of the four for-profit companies that will take over Iowa’s Medicaid management on Jan. 1. This lack of information was one of the points Democrats used in a failed effort to delay the transition during Monday's Health Policy Oversight Committee meeting.

"I'm a little disappointed in the numbers you're giving me," says Rep. John Forbes of Urbandale. "Twenty-five days before this goes live. I have some concerns about that." 

Some providers say they are reluctant to sign with Managed Care Organizations, or MCOs, as the details about management and reimbursements are unclear.

MCO representatives told the committee that once hospital agreements are signed, the number of providers and geographic coverage will also grow. 

"We're fortunate to have signed two of the major hospital systems so far, and we're very, very close on the other two," says Cheryl Harding of AmeriHealth Caritas, an MCO based in Philadelphia. "That would virtually give us complete statewide coverage." 

Another concern highlighted at the meeting was that Iowa may toss its contract with the MCO WellCare. Due to violations during the application process, an administrative law judge recommended the state nix the contract.

The Branstad Administration is still deciding whether to adhere to the recommendation, leaving 100,000 Iowa Medicaid recipients who were automatically enrolled with WellCare without a clear path. DHS officials won't advise this group how to proceed as the department doesn't comment on ongoing litigation.

"This is a complete disaster for those, more than 100,000 Iowans, who are in fear of basically maintaining their health and wellbeing," Sen. Joe Bolkcom of Iowa City told DHS Medicaid Director Mikki Stier. "They’ve been put in a circumstance, where they’ve been assigned to a company that we don’t will go forward or not. And you’re telling us today that it’s in litigation, you can’t talk about it."  

"I'm continuing to operate and implement the Managed Care Initiative as I was instructed to," replied Stier.

Though Medicaid recipients are being asked to settle on an MCO by Dec. 17, they have another 90 days to change to another MCO for any reason. Additionally, the governor announced Monday that while MCOs are still scheduled to take over Medicaid's management on New Year's Day, providers now have until the end of March before they are penalized for not signing with an MCO.

Tuesday, the Centers for Medicare and Medicaid Services is beginning a four-day visit to assess whether Iowa is ready to transition to MCOs.