Iowa Medicaid providers brace for AmeriHealth Caritas changes

It's been one week since AmeriHealth Caritas Iowa - one of the three private insurers managing the state's nearly $5 billion Medicaid program - sent out a series of notices to providers caring for Iowa's elderly and disabled detailing changes to 'establish a more sustainable program.”

And providers are still wrapping their heads around the full impact of those announcements, which left them scrambling for more details.

'We don't know a lot more than what we knew on Tuesday,” said Johnson County Supervisor Janelle Rettig, during a Friday afternoon board of supervisors work session. She was speaking to about 30 county case managers.

'As a member of the board of supervisors, I have never felt so powerless. Nothing about this situation was avoidable,” she said.

Rettig was referring to a letter from AmeriHealth that went out early last week informing case managers and their clients that it plans to move some case management services in-house. It was the first of two letters from the company detailing major changes it plans to make in the coming months to better control costs.

The second informed home and community based services providers that it would be cutting reimbursement rates.

Johnson County provides case management services to about 600 individuals, the vast majority - more than 500 - are enrolled with AmeriHealth, the only managed-care organization to still contract with external case management agencies.

Case managers help assess an individual's needs as well as find and coordinate services, from transportation and meal delivery to home health resources and skilled health care services such as physical or occupational therapy.

In many instances, case managers have worked with clients for years, which gives them an intimate knowledge of their clients' needs and makes them strong advocates.

The insurer has stressed in its communication with those agencies that this change will impact individual members and it is not focused on any specific case load or agency.

But case management agencies are left wondering how many clients will be moved and if jobs will be lost - a move the Johnson County Board of Supervisors referred to as a 'slow bleed.”

Lower reimbursement rates

For David Thielen, executive director of Arc of East Central Iowa, the change to his organization's reimbursement rates feels a little like the rug is being pulled out from underneath him.

'We budget on a fiscal year, so from July to June,” he said. 'This change takes place on April 1 in the middle of a planned budget.”

The Arc has about 800 clients with intellectual disabilities, the majority of whom are on Medicaid and a 'good number” of those are enrolled with AmeriHealth, he said. It provides supported community living services - group homes - and supported employment services, among others.

Thielen still is assessing what this drop in reimbursement rates will mean for the not-for-profit's budget. But he anticipates needing to fill in that gap through extra fundraising, grants and creating more efficiencies within the organization.

The Arc is a member of the Iowa Association of Community Providers, a group that represents more than 150 organizations across the state that provide care to 160,000 Iowans with mental health issues or disabilities.

Shelly Chandler, the association's executive director, is surveying members about the rate cut's financial impact, but so far the 60 responses that have come in put the collective hit in the neighborhood of about $12 million.

'Providers were not making money hand over fist” before the move to managed care, Chandler said. 'But we were covering costs.”

The association's top priority is sustaining services, she said, adding she already has met with AmeriHealth, Iowa's Department of Human Services and legislators to discuss the change. But she believes the state's rate payments to AmeriHealth and the other two insurers is too low, which now has trickled down and affected providers.

'They're not being paid what they need to be paid to even pay providers the floor rates,” she said.

Chandler has talked with the state about conducting an analysis of claims paid out to supported community living providers in the year leading up to the transition to recalculate the rate cells - something the state seems open to, she said.

'Right now it does not cover the cost of doing business,” she said.

Cutting costs

AmeriHealth has the highest number of Iowa's special-needs population - with more than 9,300 adults and 1,800 children, compared with Amerigroup's 1,315 adults and 490 children and UnitedHealthcare's 857 adults and 408 children, according to the most recent Department of Human Services quarterly report.

It secured such a high percentage of that population by attracting a more robust long-term services and supports provider network than the other two MCOs and by allowing Medicaid enrollees to keep their case managers.

The company was aggressive when it was contracting with providers in late 2015 and early 2016, recalled Sen. Joe Bolkcom, D-Iowa City. AmeriHealth offered providers higher reimbursement rates than the Medicaid floor set by DHS, which multiple providers told The Gazette was calculated with 2013 data.

'Given the money they've lost, they're trying to get a handle on this,” Bolkcom said.

AmeriHealth along with Amerigroup Iowa have reported hundreds of millions of dollars in losses, according to financial reports filed with the Iowa Insurance Division in November. Amerigroup saw losses of more than $147 million, and AmeriHealth had losses of more than $132 million.

UnitedHealthcare does not have to file financial reports with the state of Iowa, but did say in the second Department of Human Services quarterly report it had a loss of 25 percent.

Annual financial reports are due to the Iowa Insurance Division March 1.

'We are taking action to achieve better alignment with the Medicaid rate structure,” AmeriHealth said in a statement last week. 'In doing so, we can establish a more sustainable program that better serves our members.

'The state of Iowa set the Medicaid rate based on what providers were paid prior to the implementation of managed care. This change will not impact the care and services our members receive.”

Bolkcom and other legislators, including Sen. Liz Mathis, D-Cedar Rapids, met with AmeriHealth representatives late last week.

'It's hard to imagine there won't be layoffs,” he said. 'Some of these people (case managers) see the writing on the wall and will likely jump ship to work for them. This is not a good place for those employees or those families.”

Bolkcom and other Senate Democrats have asked leaders of the Senate Human Resources Committee and the joint Health and Human Services committee to consider holding meeting with MCO representatives and Iowa Medicaid to discuss these issues. 'They're taking it under consideration,” he said.

l Comments: (319) 398-8331; chelsea.keenan@thegazette.com