How Iowa's new Medicaid system works

How Iowa's new Medicaid system works

By Chris Essig, Chelsea Keenan & Melissa McDonald

April 1, 2016

The Centers for Medicare and Medicaid Services on Feb. 23 approved Iowa's application to move its $5 billion Medicaid system from traditional fee-for-service into managed care on April 1. This move affects more than 560,000 Medicaid enrollees - or more than 90 percent of the Medicaid population in Iowa - and 30,000 Medicaid providers.

Click through the chapters to compare the old and new Medicaid systems.


Previously: Fee-for-service

In a traditional fee-for-service system, a recipient visits a provider active in the state Medicaid network, such as a primary care doctor, and the provider is then reimbursed by the state for any services given to the patient. If you had five physicians all were reimbursed by the state.

Now: Managed care

Under the new system, the state contracts with managed care organizations, or MCOs. These are out-of-state private insurers who then in turn contract with Medicaid providers and reimburse them for services. The state pays each MCO a set rate based on the number of Medicaid recipients enrolled in the health insurance plans.

In Iowa's managed care system, Medicaid recipients must select one of the three MCOs.

Meanwhile, providers can choose to contract with one, two or all three MCOs within the system.

As a hypothetical example, let's say you have an illness that requires five physicians to treat.

We'll say four of them contracted with Amerigroup; 87.5% of primary care physicians in Eastern Iowa have as of March 24.

We'll also say three of them contracted with AmeriHealth Caritas; 59% of primary care physicians in Eastern Iowa have as of March 24.

Finally, we'll say four of them contracted with UnitedHealthcare; 79.7% of primary care physicians in Eastern Iowa have as of March 24.

In this simulation, not all of your doctors ended up being covered by the same MCO. Therefore, when choosing a MCO, you would need to decide which doctors you want to continue to see.

While this is a hypothetical example, many Iowans are facing this same dilemma.

Besides primary care doctors, the transition will affect other Medicaid providers including hospitals, medical transportation services, pharmacists, case managers, therapists and more.

To find out which of the three MCOs your providers have contracted with, talk with your providers or contact the MCOs directly.