Two state senators seek to stop or slow Medicaid managed care in Iowa

DES MOINES - Two Democratic state senators are asking the Obama administration to 'stop or slow down” what they view as Gov. Terry Branstad's 'rush” to privatize health care for at-risk Iowans who rely on Medicaid-funded services.

Sens. Amanda Ragan, D-Mason City, and Liz Mathis, D-Robins, sent a letter Thursday to officials in the federal Centers for Medicare & Medicaid Services who are considering the Branstad administration's request for approval of waivers needed to establish a statewide managed care delivery system for the majority of Iowa's 560,000 Medicaid enrollees.

'We have already witnessed the tragic and unnecessary deaths of three Iowans caused by the governor's unilateral decision to close two mental health institutes in our state,” the two senators said in a joint letter to CMS acting administrator Andrew Slavitt.

'The governor appears to be on a similar path with his hasty, unilateral decision to privatize Iowa's Medicaid program,” added Mathis, chairwoman of the Senate Human Resources Committee, and Ragan, co-leader of the House-Senate health & human services budget subcommittee. 'That's why we are worried that hundreds or even thousands of Iowans will be put at risk by management companies that will profit by denying critical services to seniors, people with physical and mental disabilities, children and moms.”

The Democrats' letter follows a request for waivers made last week by Iowa officials as part of the Republican governor's plan to shift Medicaid to a privately run managed care system effective Jan. 1 - a change they expect will provide quality services while saving a projected $51.3 million in the first six months.

Branstad spokesman Jimmy Centers said Democrats who hold a 26-24 majority in the Iowa Senate passed legislation that approved the governor's plan to modernize the delivery of Medicaid during the 2015 legislative session and even doubled the projected savings in budget documents compared to Branstad administration projections.

'Iowa Senate Democrats are trying to have it both ways. They approved and passed an HHS budget that includes savings from Medicaid modernization,” Centers said. 'Senate Democrats cannot then come back after the fact and say we want the savings from modernization that we passed, but don't want the modernization. That's nothing more than Washington, D.C.-style double talk.”

The governor's approach 'ensures efficient management while protecting the taxpayers who finance the Medicaid program,” Centers said, adding that Branstad is committed to partnering with modern plans that work to find savings by improving the quality of access, care, and outcomes for Medicaid patients.

In their joint letter, Ragan and Mathis expressed concern that effort to privatize Medicaid in other states have failed to save money and often resulted in recipients paying more money for less health care. They proposed 11 changes to increase protections for Iowa families should Branstad's plan not be completely rejected by federal overseers, including a phase-in of the changes rather that 'an abrupt” switch next Jan. 1 and the establishment of a 'robust,” independent case management system, and the creation of an independent appeals process for consumers and providers.

'No other state in the country has moved this quickly to convert its entire Medicaid population to managed care,” they wrote. 'It is now mid-September and the Iowa Department of Human Services (DHS) does not yet have signed contracts with the four managed care companies. How can they possibly develop adequate provider networks and transition 560,000 people to private plans in less than 4 months?”

DHS officials say they are negotiating contracts with four winning private bidders to move to a risk-based Medicaid modernization initiative aimed at improving coordination and quality of care while providing predictability and sustainability for taxpayers in Medicaid spending. They contend the goal of the new Iowa Health Link program is to improve quality and access, promote accountability for outcomes and create a more predictable and sustainable Medicaid budget for a program that has grown 73 percent since 2003 to more than $4.2 billion in the last fiscal year, including $1.39 billion in state general fund taxpayer dollars.

The private vendors initially selected in the request for proposals process were Amerigroup Iowa, Inc.; AmeriHealth Caritas Iowa, Inc.; UnitedHealthcare Plan of the River Valley, Inc.; and WellCare of Iowa, Inc. Meanwhile, three competing companies - Aetna, Iowa Total Care and Meridian - have challenged the selection process on a variety of grounds ranging from evaluator bias to scoring methodology deficiencies, process flaws and potential conflict of interests. Administrative hearings are set in October to consider the companies' appeal of the DHS' refusal to reconsider or reopen the bidding process.

The state senators aren't the only Iowans with misgivings about the Medicaid privatization proposal. An Iowa Hospital Association position paper is supportive of some transformation efforts within the Medicaid program via the Accountable Care Organization approach. However, the IHA opposes the Iowa initiative given past experience in Iowa with national managed care organizations and 'lessons learned from managed care in other states” as well as concerns over access to care for Medicaid beneficiaries and reimbursement for care to providers.

IHA concerns revolved around issues of cost, access, quality and the procurement and implementation timeline.

”The timeline is far too aggressive, unrealistic and increases the potential for unintended consequences,” the IHA said in a position paper made available by Scott McIntyre, the association's vice president of communications. 'Rushing this process will result in unnecessary patient and provider confusion, claims denials and restricted access to care and potential litigation.”