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CEDAR RAPIDS — Iowa’s human services chief took a tough negotiating stance Thursday, saying he will not ease the state’s oversight and accountability requirements for private companies managing Iowa’s $5 billion Medicaid program and “write them a blank check” in the interest of getting a new contract.
Jerry Foxhoven, director of the Iowa Department of Human Services, conceded it is well past the time he expected it would take to negotiate Medicaid rates with three managed care organizations that will be retroactive to July 1.
"It’s not going to be a pretty transition but we will hold the (companies) accountable."
- Jerry Foxhoven
Director of the Iowa Department of Human Services
The state has contracted with Amerigroup, AmeriHealth Caritas Iowa and UnitedHealthcare Plan of Iowa to manage care since April 2016 for 767,000 Iowans. Human Services negotiators have reached tentative agreement for a new contract with one company, but talks are continuing with the other two.
“We have to be firm,” Foxhoven said during a discussion on the future of Medicaid in Iowa that was part of the two-day Iowa Ideas conference, organized by The Gazette, that ends Friday.
“We have to be willing to say if you don’t actually manage care, if you don’t actually keep it below fee-for-services, if you don’t actually allow us to manage it to make sure that we have some oversight of you, we will not give up that oversight and if you’re not willing to do that and you need to walk, then you need to walk and we’ll replace you.”
Foxhoven noted that other states have been unable to reach agreements with insurers once they had privatized their Medicaid programs, which he said can be a sign of success if the government agency is standing up for the interest of patients, providers, caregivers and clients being served. In Iowa’s case, that’s 1 out of every 4 residents, he said.
Foxhoven, a lawyer and a litigator who took over the Human Services reins in June, said he has been absorbed in talks over the 100-page plus contracts, including Thursday morning before the conference and on the car ride from Des Moines to Cedar Rapids to the point where “I feel like I have PTSD right now” from working with the companies.
He said he was “very, very optimistic” about reaching agreements, but if not “then we’ll get other people to do it.
“If that has to happen, I’m hoping it doesn’t, but if that happen, it’s not going to be a pretty transition but we will hold the (companies) accountable,” he told conference participants.
Foxhoven’s comments came during a segment where co-panelist state Sen. Liz Mathis, D-Robins, raised concerns about problems Iowans and health care providers have faced during Medicaid’s transition to privately managed care.
She expressed concern about the potential for future problems if federal officials shift to funding the system to block grants given the states.
A representative of one of Iowa’s largest health care providers, Jean Robillard, vice president for medical affairs of the $1.9 billion University of Iowa Health Care enterprise and dean of the UI Carver College of Medicine, said Iowa’s biggest and most-profitable hospital saw a spike in denials from Medicaid managed-care payers and a corresponding drop in the hospital’s collection rate.
Speaking during a separate health care discussion, Robillard said the working relationship with the Medicaid companies has improved over time but added, “it’s still not all resolved.”
“We’d like to see a stabilization of some of the payment issues. We’re gradually making progress with the (companies) on that front. We still have a little ways to go but we’d like to get past that,” he said.
Robillard and Jennifer Vermeer, UI assistant vice president for health policy and population health, said the health care industry is facing considerable uncertainty as policymakers revamp the Affordable Care Act and shift the focus to valued-based delivery rather than a fee-for-service system.
Robillard said health care providers are paid based on quality and the ability to decrease costs, but he said the focus has to continue to include safety and outcomes.
“We don’t set the price, the insurance companies do. I understand that. We are the price taker, we’re not the price setter. We are probably the only business in this world where we don’t set the price,” he said. “Imagine if you were going to Target and you could go in the store and set the price of what you want to buy. Well, this is a little bit the way it is for us. We have to adjust our cost based upon what we have.”
Vermeer said fee-for-service drove a lot of costs and fragmentation of services and the system is in the process of being re-engineered.
“It’s going to be a long journey. We’ve been at it for a number of years and we’re beginning to make progress and I think you’re seeing this across the country. But I think it’s also apparent that it’s going to take quite some time to get there,” she said.
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