Iowa’s Medicaid switch won’t be deterred, Branstad maintains

URBANDALE - Gov. Terry Branstad fired back Wednesday at critics of the state's decision to contract with three managed care organizations to oversee Iowa's $5 billion Medicaid program for more than 560,000 recipients - a change that has played to mixed reviews since the April 1 implementation.

Branstad said the approach has been praised by governors - both Democratic and Republican - in other states that have employed private managed care organizations (MCO) to modernize service delivery more efficiently and effectively while ferreting out fraud and abuse by checking claims to make sure they're legitimate before they're paid.

'It's not privatization. It's managed care for Medicaid. They've been doing it all over the country,” Branstad told members of the Westside Conservative Club. He said critics want to stick with an old system that didn't work and most of the complaints are coming from providers who are upset 'because we're checking on them now.”

'The Democrats don't like it and the Des Moines Register hates it,” Branstad said. 'We're not going to be deterred by that.

'These great so-called progressives are the ones that are the most against progress. They're stuck in the past. They want to keep doing it the expensive, old-fashioned way that doesn't work as effectively and efficiently as what we're doing today, and we're not going to be deterred,” he added.

One day earlier, members of the Senate Human Services Committee heard concerns that service providers such as hospitals, nursing homes and mental health agencies, have experienced delays or problems since April 1 in getting reimbursed that are threatening their financial viability and have forced some layoffs.

At the heart of Tuesday's committee meeting was provider payments - MCOs and the state say the majority of claims are being paid cleanly and timely, while providers testified otherwise.

According to state Department of Human Services (DHS) data released Tuesday, the state's three MCOs - Amerigroup Iowa, AmeriHealth Caritas Iowa and UnitedHealthcare of the River Valley - have paid a total of $899.3 million to providers from April through June.

Of the more than 4.9 million claims submitted during the first three months, about 3.4 million were paid while 1.2 million were denied, 300,000 were suspended and 101,000 were rejected - meaning the claims were missing key pieces of information. State officials also pointed to data that showed the three MCOs were paying at least 95 percent of claims within 21 days.

'I think the transition has been rugged, it's been sloppy, and there's just a disconnect between what we're hearing from state officials and what the providers are telling us,” said Sen. Liz Mathis, D-Cedar Rapids, Human Resources committee chairwoman.

'We need some resolution because pretty soon we're going to see providers go out of business,” added Mathis, who said she was particularly concerned about smaller service providers in rural areas. She said more accountability was needed for the MCOs via oversight regulation and Iowa's Medicaid Enterprise to resolve the billing issues in a timely manner.

Representative of the three MCOs told legislators Iowa's transition has gone smoother than some other states, and they expected claim problems to subside one providers got acclimated to the new billing process, but Mathis said 'I thought we would be farther along than this, I really did. I thought the transition would be a little smoother and it's nothing but.”