Survey: Iowa Medicaid providers not getting paid on time, running into billing issues

Forty-six percent of respondents say they will reduce services

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

Hundreds of Medicaid providers have run into billing issues since the April 1 transition of the state’s $5 billion Medicaid program over to three out-of-state, private insurers, according to a survey released by Iowa Democratic legislators on Monday.

The survey includes responses from more than 400 Iowa providers, including doctors, hospitals, clinics and not-for-profit agencies. Legislators used social media to solicit the responses over about a month’s time, during June and July.

Problems range from late and inaccurate payments to increased administrative costs and reduction in services.

“We know that those who were drawn to the survey are people experiencing the most difficulty,” said Sen. Liz Mathis, D-Cedar Rapids. “But 423 responses is a pretty good number. There is a high number of people who are concerned or angry, and (423) is a reflection of larger numbers.”

Mathis is holding an out-of-session Senate Human Resources Committee meeting on Tuesday with representatives from the three managed-care organizations and the state Department of Human Services as well as Medicaid providers and beneficiaries to discuss the first four months of the transition.

Since the transition began, The Gazette has reported that providers across the state — from rehabilitation therapists and in-home care providers to Meals on Wheels and nursing homes — have seen slow or inaccurate payments that have forced them to dip into savings or extend their lines of credit.

According the survey, 90 percent of respondents have seen their administrative costs increase and nearly two-thirds have received lower reimbursement rates. Nearly eight in 10 providers who completed the survey said they are not getting paid on time and 28 percent of providers have been forced to take out loans to cover their expenses while waiting for payment.


“These survey results confirm what Iowans across the state have been saying to us for months: The Medicaid mess is a major burden for Iowa health care providers,” said Rep. Lisa Heddens, D-Ames, ranking member of the House Human Services Budget Committee, in a news release.

Providers who completed the survey also said services for Iowans on Medicaid could suffer as a result of the move to managed care. Forty-six percent of providers said they have or will be reducing services, while 61 percent said quality of services is suffering as a result of privatization.

That includes Eye Physicians & Surgeons, an Iowa City-based eye clinic. The clinic, which participated in the provider survey, decided to sign with only one MCO, AmeriHealth Caritas Iowa, due to uncertainty and additional administrative costs, administrator Debi Kendall said.

In the months since the transition, the clinic has run into multiple headaches — late checks sent to old, outdated addresses, incorrect payments and cumbersome prior-authorization processes.

The new administrative hassles have lead the clinic to decide to no longer offer routine vision exams to Medicaid patients, she said, but it still provides medical and surgical services for those patients.

Kendall added that the two employees in her billing department are spending most of their time ironing out these issues.

“We just did not have these problems before,” she said. “We’re leaning toward not accepting Medicaid at all because we can’t bring on another individual on staff to help deal with this.”

Ben Hammes, spokesman for Gov. Terry Branstad, said the survey accounts for about 1 percent of the state’s 29,000 providers, adding the state’s Democratic representatives have been against managed care from the start.


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“So I am not surprised that the hyperpartisan Democrats use an unverified, unscientific survey of unnamed providers to try and undercut a transition that has been approved by federal officials and has been smooth for the vast majority of patients and providers,” he said.

Also on Monday, Branstad released information in regard to the Medicaid transition, saying beneficiaries have “more choice than ever before fitting their individual needs, more access to services, including twice as many doctors and nurses, and real accountability.”

Branstad said more than 119,500 contracts have been signed, 41 percent more than the 84,500 contracts under fee for service.


Highlights from the Medicaid Provider Survey:

423 Responses from Iowa providers

• 46 percent of providers will or are planning to reduce services

• 80 percent have seen an increase in the rates of denied claims since privatization began

• 19 percent said their organization or clients have successfully appealed denials, while 45 percent have not

• 61 percent said privatization has reduced the quality of services they can provide

• 38 percent said Iowa Medicaid patients are not able to continue seeing their specialty providers out-of-network

• 90 percent said Medicaid privatization has increased their administrative costs

• 28 percent of providers have been forced to take out loans to cover their expenses while waiting for payment

• 66 percent said reimbursed rates have been lower than their contractual rates

• 79 percent of providers said they are not getting paid on time



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