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Cedar Rapids, Iowa 52401
Years after privatization, there’s still a deep divide in Iowa when it comes to the state’s Medicaid program.
This year marks the fifth anniversary since Iowa overhauled its Medicaid program, moving it from a state-run system to a managed-care model that handed the reins over to private, out-of-state insurance companies. Today, the $5 billion program administers health care benefits to more than 700,000 poor and disabled Iowans a year.
The program has stabilized since the tumultuous roll out and the upheavals in the years since, according to state leadership, allowing them to focus on improving health outcomes of Iowans on Medicaid.
“We’re not having the same type of conversations we were four or five years ago,” Iowa Medicaid Director Elizabeth Matney said in a Gazette interview. Matney, who was recently appointed to the role, will start June 1.
And according to Kelly Garcia, director of Iowa’s Department of Human Services, the managed-care program is accomplishing what officials set out to do when they switched to managed care — improving the health of Iowans and saving the state money.
“We are stable,” Garcia said.
Despite that, criticism of the program has not stopped. Complaints from providers about low reimbursement are reminiscent of the same complaints voiced four and five years ago. Advocates say Medicaid members, particularly those who require long-term supports, struggle to obtain the care they need.
“Iowans were made more vulnerable by privatization,” said Jenn Wolff, a disability advocate behind the #UpgradeMedicaid initiative.
Garcia said the department still is hearing those concerns, but emphasized the program is in a better place even than what it was a year ago.
“That happens, but it is not what was occurring even when I arrived in the state eight months ago,” she said. “And we’ve seen a signal from DHS that we have a focus on holding our managed-care organizations accountable.”
Garcia came to Iowa in November 2019 after working in a variety of roles with the Health and Human Services Commission in Texas.
Some opponents of the state’s managed-care program continue to question the claim that the switch from a government-run Medicaid system to a privatized model is saving the state money, first stated by then-Gov. Terry Branstad. During comments on the Senate floor ahead of the five-year milestone, State Sen. Janet Petersen, D-Des Moines, said the program has cost taxpayers millions while the insurance companies handling the program have seen major profits in state fiscal year 2020 and 2021.
According to the latest report, capitation payments to the managed-care organizations amounted to $1.36 billion for the second quarter of state fiscal year 2021.
“We were promised savings and promised better access to services and better health for Iowans. That’s not true,” Petersen told The Gazette.
State leadership has disagreed with the claim that it has no data to prove the program is saving money.
“For years, we’ve been pushing data out, but we could do a better job explaining the ‘so what?’ question,” Matney said.
The state is saving money compared to the previous program, Garcia said to The Gazette this past week. Her department is making a renewed push to enhance its data collection systems — including one that’s more than 40 years old — to increase accessibility and ease of use for employees and for the public.
“The system doesn’t have a shortage of data, it’s really the ease and availability,” said Garcia, who also acts as director of the Iowa Department of Public Health.
“I think our providers, our clients, legislators, our full spectrum of stakeholders don't see us using that information in the way that they like and I think internally, we don’t have what we would like,” she said. “So we’re building that.”
However, state officials have not specified how much money the state is saving when compared to the previous, state-run program.
Then-Medicaid Director Michael Randol, who left the position in August, stated the switch to managed care had saved the state $140.9 million for fiscal year 2018 — which conflicted with earlier estimates that put the savings at a low figure.
Challenges plagued program since Day One
The switch to managed care didn’t happen without what one state official at the time described as bumps in the road. Even before the switch, the federal Centers for Disease Control and Prevention stepped in to delay the transition over concerns about the state’s readiness.
Federal health officials gave their approval in early 2016, and the program switched management on April 1 of that year.
Challenges continued to plague the program. Managed-care organizations left the program due to what they described as chronic underfunding, starting with the exit of AmeriHealth Caritas in late 2017 and followed by UnitedHealthcare of the River Valley in 2019.
Two managed-care organizations, Amerigroup and Iowa Total Care, currently manage the program. State officials say a third insurer may be brought into the program as they approach contract negotiations for Amerigroup, whose current contract is scheduled to expire in mid-2023.
But the abrupt exits of those previous insurers resulted in upheavals for Medicaid member services, patients and advocates say.
Early on, Iowans claimed they were denied necessary health care and providers complained they failed to receive full or partial reimbursement for their services. At one stage, the Iowa Ombudsman’s Office assigned a full-time staff member to respond to Iowans’ complaints about the managed-care program, Ombudsman Kristie Hirschman said in 2017.
April 1, 2016 — Iowa’s Medicaid program transitions to managed care.
October 2017 — AmeriHealth Caritas, one of the managed-care organization, exits the program.
December 2017 — Michael Randol becomes director of Iowa Medicaid Enterprises.
May 2018 — Iowa Total Care is selected as a new managed-care organization.
March 2019 — UnitedHealthcare of the River Valley quits as a managed-care organization.
August 2020 — Randol leaves his position in Iowa.
April 2021 — Elizabeth Matney appointed as new director of Medicaid.
Now, five years later, some Iowans say they aren’t able to get the services they need from the managed-care organizations.
For Garrett Frey, a quadriplegic who relies on a ventilator to breathe, it’s been a challenge to get the in-home nursing to help with his personal care needs. As a result, he’s had to rely more on his mother to fill the gaps, which he said has taken a heavy toll on his family.
“I have a great support system, but I do not know where I’d be without them,” said Frey, who also serves on the city of Cedar Rapids’ ADA Advisory Committee. “But I do not feel my mom should feel compelled to be my primary caregiver, or any of my family.”
#UpgradeMedicaid’s Wolff said Frey is not the only member who believes they constantly are advocating for services they need. Reducing services for disabled Iowans and others that require 24-hour care will not improve their health, she said, but will raise costs for the managed-care organizations.
“People are getting sick, they are having more physical symptoms and more mental health issues because of their level of stress,” Wolff said.
To continue addressing those complaints, the Department of Human Services’ Garcia said the department is adding staff to focus on issues that arise with both members and providers.
“Any big system is going to have some challenges. It’s really important that we hear those and then we get to whether it is a one off or is a systemic issue,” she said.
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