Company asks DHS to halt Medicaid plan

In another legal turn, on Wednesday Aetna Better Health - a private company the state passed over to manage Iowa's $5 billion Medicaid program - has asked the Department of Human Services to immediately halt the implementation of all of four managed-care contracts and related contracts, including those with providers.

The company filed for review of proposed decision and a request for stay in DHS's appeals division.

'Wholly aside from this contested case action, the state's Medicaid Modernization Initiative is under widespread attack by various stakeholders, including legislators, providers and Medicaid recipients,” according to Aetna's filing. 'The common link among all of these stakeholders' concerns is that in its rush to implement managed care, DHS has created far more problems for the state than any managed-care plan could hope to solve.”

Aetna is asking DHS Director Charles Palmer to enter a final ruling in the matter by Dec. 9 as the state intends to begin implementing managed care on Jan. 1, 2016.

'If no final ruling has been issued as of that date, Aetna Better Health intends to move forward with relief in the district court on grounds that relief before the agency would be futile after that point,” according to the filing.

The filing goes on to say that while a ruling last week from an administrative law judge acknowledged flaws in the procurement process - the largest in state history - it did not go far enough, as Judge Christie Scase did not recommend throwing out the process and starting again.

Lawyers representing Aetna as well as two other companies that were not awarded contracts argued in late October that DHS used a flawed bidding system and that representatives from WellCare of Iowa - a company that was awarded a contract - had improper communication with state officials.

Scase recommended on Nov. 25 that the state throw out WellCare's contract. Gov. Terry Branstad has said the ruling won't slow the transition and has appointed Janet Phipps, director of the state Department of Administrative Services, to review the finding and render a decision.

Meanwhile, WellCare has said it also intends to appeal the decision.

'We strongly believe this decision is incorrect and will file an appeal with the state,” WellCare spokeswoman Crystal Warwell Walker said in an email. 'This development does not change our commitment to serve Iowa. All of our plans to be ready for a Jan. 1 implementation remain intact.”

Also on Wednesday, DHS held the first of a series of public hearings to receive comments on proposed

amendments regarding the Medicaid plan. About a dozen people trickled into the Cedar Rapids Public Library for the hearing - most of whom expressed disappointment when a Linn County DHS representative told them she could not answer questions.

Only one attendee offered up comment for the public record, and it revolved around his experience with the transition rather than comment on proposed rules.

Jeremy Brigham of Cedar Rapids told the group that he cares for three grandchildren, all of whom are on Medicaid. All three also have been assigned to WellCare, he said.

He worries about their future care and is unsure what doctors they will be able to continue to see.

'Medicaid took care of big expenses that otherwise would have been devastating to us,” he said.

Grassley didn't intervene

During his weekly conference call with reporters, U.S. Sen. Chuck Grassley on Wednesday said as long as the state's program meets certain requirements, the federal government will continue to pay the majority of Medicaid costs this year and next year.

'We just kick in our share without question,” he said.

Grassley anticipates the federal government will pay about 59 percent next year, which is down from 63 percent in previous years.

He added that his office this past spring was asked to make sure there were adequate safeguards in place to ensure vulnerable Medicaid recipients would continue to receive services, which he felt there were.

The Iowa Hospital Association also asked him to intervene with the Centers for Medicare and Medicaid Services - the federal agency that still must approve the plan. CMS officials will conduct readiness reviews with DHS and the four managed-care organizations next week.

The hospital association has come out against the move and has filed a petition for declaratory judgment and injunctive relief with the Polk County District Court, asking the court to delay the implementation of managed care until a legal conflict is addressed.

'We didn't do that (intervene) because we've seen similar things, similar approaches in 20 or 30 states that have received waivers,” Grassley said. 'With the ease that other states got waivers, we just assumed that CMS was going to give a waiver for Iowa.

'Beyond those two instances, it's a state issue,” Grassley said.

Reporters James Lynch and Rod Boshart contributed to this article.