Iowa Senate leader: State still not ready for privatized Medicaid care

DES MOINES - A top Senate Democrat said Thursday she does not believe Iowa will have the safeguards in place by March 1 to proceed with the change to privately managed Medicaid services, and she hopes federal regulators again will delay implementation of Gov. Terry Branstad's modernization effort.

'Absolutely, I do,” said Senate President Pam Jochum, D-Dubuque. 'We are still not ready. If I had my way, we would stop the whole thing from happening altogether.”

However, Jochum said the final decision rests with the federal Centers for Medicare and Medicaid Services (CMS), which funds 55 percent of Iowa's Medicaid program that covers 560,000 recipients and spelled out requirements for state officials to meet in a readiness report, when plans to switch management to private companies were moved back by two months.

The governor had planned to switch Iowa's Medicaid system to private management Jan. 1, but federal officials told the state in December they didn't believe Iowa was ready to transition its $5 billion Medicaid program to managed care and delayed the move until March 1.

CMS regulators have indicated they believe they eventually will be able to grant waivers to allow three, possibly four, private out-of-state companies to manage care to Iowa's Medicaid clients, but Jochum said she's concerned vulnerable Iowans may get shortchanged without proper oversight in place to head off problems regarding access to improved service, as well as reimbursement reductions to local providers that cropped up in other states that privatized Medicaid service delivery. She also challenged the savings projections Branstad administration officials have attached to privatization.

Following Jochum's remarks Thursday, Branstad spokesman Ben Hammes issued a statement saying 'the state was ready to move to managed care on Jan. 1. We are working hand in hand with CMS for a March 1 implementation date. But I would point out to Sen. Jochum that the delay has already cost the state savings, and any additional delay will be savings lost.”

Earlier this week, State Long-Term Care Ombudsman Deanna Clingan-Fischer told state lawmakers her office already is struggling to keep up with the volume of calls from Iowa Medicaid recipients who have questions about the changeover to managed care even with the addition of two staff members. She said 'best practices” call for one ombudsman per 3,500 Medicaid clients.

A multi-agency workgroup issued a report earlier this month indicating Iowa would need to hire 134 additional workers and spend as much as $17 million more a year to properly expand ombudsman oversight of the switch to privatize Iowa's Medicaid management - a level the governor called 'overkill.”

On Thursday, Jochum said a $2 million alternative oversight plan or a phased-in approach might be more 'doable,” and she hoped legislative Republicans would help forge a bipartisan funding and oversight package this session to foster the stated goals of improved health outcomes while better controlling spiraling Medicaid costs.

House Speaker Linda Upmeyer, R-Clear Lake, said House Republicans want to make certain the ombudsman has adequate staffing to respond to questions 'that legitimately belong” to that office, but many of the current inquiries should be handled by the providers.

Oversight questions will be addressed during the appropriations process, Upmeyer said, but the cost projection contained in the multi-agency work group's report 'was a staggering number” and it was 'too early to predict” where the split-control Legislature would land on the oversight issue.

'I think that number seems very large, and that would take another really large bite out of the resources,” she said.

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