Mixed feelings in other states for managed Medicaid

DES MOINES - While Iowa is pushing ahead on plans to turn over its Medicaid program to private management companies, the jury still is out on the success of similar transitions in two states that recently completed the move.

Gov. Terry Branstad's administration insists it will be ready to move the $5 billion health care program for disabled, aging and low-income residents to managed-care organizations on Jan. 1.

There are plenty of skeptics, however, that the state will be ready in less than a month, and the critics also question claims that the move will save the state money while maintaining the quality of care patients receive now.

Assessments made by those involved with managed Medicaid in Kansas and Florida, two states that recently underwent the change, sound similar to the debate taking place in Iowa.

Kansas and Florida state officials insist managed Medicaid has led to better patient services and outcomes, and in the process saved them some money. Meantime, patients, families and advocates in those states say services have suffered since program management moved to for-profit businesses.

'Managed care, if done right and if you really are managing the care of the people and you are seeing measurable, significant health outcomes, ...

could be a very positive thing,” said Mitzi McFatrich, executive director of Kansas Advocates for Better Care, a not-for-profit advocacy group for seniors. 'But I don't believe that's how it's being implemented in our state, and it's not what I'm hearing from advocates across the country about how Medicaid is being implemented there.”

Nearly all states have at least some portion of their Medicaid programs in managed care, as did Iowa before the current transition. More than half of all Medicaid beneficiaries receive most or all of their care from a managed care organization, according to the Kaiser Family Foundation.

Thirty-nine states have contracts with comprehensive managed care organizations - those that provide acute and long-term care services, according to the foundation.

Kansas completed its transition to managed Medicaid on the first day of 2013. State officials say the move has been successful, while advocates are less effusive.

Mike Randall, director of Kansas's Division of Health Care Finance, said Medicaid patients there are seeing their primary physicians more and using the emergency room less, and the state has slowed the program's spending growth rate by 2.5 percent.

'From our perspective, I think we're doing well,” Randall said. 'All those things you would expect to see in a managed-care program, we're seeing those.”

McFatrich paints a less-rosy picture of Kansas's managed Medicaid program.

She said during the transition some patients were forced to find new case managers, there have not been a sufficient amount of Medicaid providers - particularly in rural areas, and she believes the program has a troubling lack of oversight and data tracking.

McFatrich also said she is dubious that having for-profit businesses operate the state's Medicaid program will save the state money in the long term without interrupting services.

'Somebody has to explain to me how it is more financially advantageous to be contracting with for-profit companies than it is to be funding non-profits because I don't see the financial savings there,” McFatrich said. 'I don't see any other way you see managed growth.”

When asked if she thinks Kansas was better off when Medicaid patients were served through the state, however, McFatrich was not certain.

'I think we were doing a good job, but we weren't funding the services at the level we needed to be funding then. We had too many people on waiting lists,” she said. 'But the state's not putting more money into the system.”

‘Highest level of quality'

Florida had voluntary managed Medicaid for years before making it mandatory statewide in 2014.

Again, state officials have declared the program a success, while advocates are critical.

Justin Senior, the deputy secretary of Florida's Medicaid division, said in an emailed statement that the state's Medicaid costs have dropped five percent.

'Florida's Medicaid program is currently operating at the highest level of quality in its history, and it is doing so at a substantial per-person savings to Florida's taxpayers,” Senior said. 'This means that the most vulnerable among us are getting the right care, in the right setting, at the right time, preventing costly health crises and leading to better health care for all Floridians.”

But Laura Brennaman, policy and research director for a Florida consumer health advocacy organization, said it's too early to declare the state's managed Medicaid program a success. Some patients, she said, have had difficulty accessing some services, and there are concerns the state is not paying providers a high enough reimbursement rate.

Despite her concerns of the moment, Brennaman is hopeful Florida's statewide managed Medicaid program will have a positive effect.

'It is possible, in the long run, if the care is managed effectively and there is good case management, people could be healthier and we actually could see some savings,” Brennaman said. 'If care management does what we hope it would, we should see a reduction in state expenses way down the road. …

But it's going to take a while.”

Eric Carlson, a lawyer with the advocacy group Justice in Aging, consults with advocates and patients in states that are undergoing a transition to managed Medicaid, although he added he has not yet worked with anyone from Iowa.

Carlson said reduced services and a lack of transparency are the biggest complaints he hears about managed Medicaid.

'The big one probably is the loss of services, particularly for home- and community-based services in the transition to managed care,” Carlson said.

Where Iowa stands

On Jan. 1, management of Iowa's $5 billion Medicaid program will move from the state to three or four private companies. The transition has been rife with criticism and legal challenges and still must be approved by the federal government.

Here is where the transition stands:

l Four companies won bids to administer Iowa's Medicaid program, but an administrative law judge recommended the contract with WellCare be rejected because the company withheld from its application pertinent information about a prior fraud case involving three former executives. WellCare plans to appeal that recommendation.

The recommendation went back to the state, and Gov. Terry Branstad appointed Department of Administrative Services Director Janet Phipps to review the judge's recommendation and help determine what action the state should take. A decision is expected this month.

The administrative law judge's recommendation was in response to a lawsuit filed by some of the companies passed over in the contract bidding process.

One such company, Aetna Better Health, last week also filed a request asking the state Department of Human Services to halt implementation of the new managed Medicaid system.

l According to the most recent state data, the four managed-care organizations have contracted with between 28 percent and 43 percent of Medicaid providers.

The state last week announced three major hospital systems, the University of Iowa Hospitals and Clinics, UnityPoint Health and Genesis Health System, have reached agreements with at least one managed-care organization.

l Medicaid beneficiaries have until Dec. 17 to enroll with at least one managed-care organization, and they may enroll with as many as they would like. Some populations will be phased into the managed-care structure.