Health

Judge says no to WellCare request to continue Iowa Medicaid operations

Managed care company will appeal decision to toss out contract

Enrollment information for managed-care organizations, including WellCare, in Iowa’s Medicaid privatization plan, photographed in Cedar Rapids on Friday, Dec. 18, 2015. (Liz Martin/The Gazette)
Enrollment information for managed-care organizations, including WellCare, in Iowa’s Medicaid privatization plan, photographed in Cedar Rapids on Friday, Dec. 18, 2015. (Liz Martin/The Gazette)

A district judge on Friday denied WellCare of Iowa’s request to continue operations until the managed-care company is able to appeal a state arbiter’s decision to throw out its Medicaid contract.

The Tampa-based company was one of four managed-care organizations selected to handle the state’s $5 billion Medicaid program with 560,000 enrollees. The state Medicaid system originally was scheduled to transition from a fee-for-service system to managed care on Jan. 1, but federal officials delayed the move until March 1.

Janet Phipps, director of the state Department of Administrative Services, said in December that WellCare’s bid should be disqualified and the subsequent contract terminated. Phipps said the company failed to disclose in its bid a corporate integrity agreement that would have included information on $137.5 million in fines to resolves false claims litigation.

However, WellCare insists it provided that information, and has argued it will experience a financial loss, according to court documents. The company said it spent significant time, effort and resources to prepare for the transition.

But Judge Robert Blink said in his ruling Friday that granting a stay would cause confusion and uncertainty for Medicaid recipients as well as providers.

“The interest of providing a stable, consistent Medicaid program for 560,000 Iowans weighs more heavily on the scales than the potential loss of profits,” he wrote.

The decision means about 134,000 Medicaid recipients who selected WellCare or kept their tentative WellCare assignment will be reassigned to the three remaining managed-care organizations — AmeriHealth Caritas, Amerigroup Iowa and UnitedHealthcare of the River Valley — “as soon as possible,” according to the Iowa Department of Human Services.

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Medicaid enrollees can keep their upcoming reassignment or make a different selection by Feb. 17 for coverage beginning on March 1, the DHS said. All Medicaid enrollees have the opportunity to change their managed-care organization selection until May 18 for any reason.

WellCare will argue why it should keep its contract before a judge on Feb. 1.

“We are reviewing the decision and evaluating options to address the factual and legal errors in Director Phipps’s decision,” said Crystal Walker, a WellCare spokeswoman.

Blink also denied Aetna Better Health of Iowa’s request to stop the implementation of managed care and reopen the bidding process. The company — which was passed over for a Medicaid contract — argued the bidding process was flawed.

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