State officials say Iowa Medicaid is improving - but providers are still concerned

Ann Brownsberger, director at The Village Community in West Branch, reveals a message that says
Ann Brownsberger, director at The Village Community in West Branch, reveals a message that says “Your smile makes me happy!” while playing a messaging game with Ciara Warden on Wednesday, Feb. 13, 2019. The day habilitation facility in West Branch cares for about 15 disabled individuals, all on Medicaid. Since the transition to Managed Care, Brownsberger said her administrative workload has increased. (Liz Martin/The Gazette)

It was almost three years ago that Iowa handed over its Medicaid program to private, out-of-state insurance companies. Has the move been a success? It depends on whom you ask.

The governor, for one, has said she’s tired of hearing from health care providers who still aren’t receiving payment on time.

According to Iowa Department of Human Services Director Jerry Foxhoven, managed care has matured beyond its issues of the past in recent months and is beginning to benefit the health of Iowans enrolled in the program.

A grievance refers to a complaint or dispute that expresses dissatisfaction with how Medicaid enrollee’s care was handled. An appeal is a formal request from an enrollee to a managed-care organization to take action on its decision to limit or deny services. Here is a look at -grievances and appeals, combined, for each of the managed-care organizations since Iowa’s Medicaid program was privatized in April 2016. The spike for United Healthcare of the River Valley -- and the sudden drop for AmeriHealth Caritas – visible at around the first quarter of fiscal year 2018 reflect when AmeriHealth, which carried Iowa’s largest population of special-needs enrollees, left the state’s program, in late 2017, and United Healthcare picked up their coverage.

“The goal is, at some point, for managed care to actually start improving the health of the citizens — that’s why we call it managed care,” Foxhoven said in an interview with The Gazette. “They actually start doing some things that reduce the cost of Medicaid by improving health outcomes for the people.

“We’re not moved to the level where we’re starting to be able to concentrate on that,” he added.

But while things have been getting easier for some health care providers and the Medicaid enrollees they serve, challenges from the program’s start back in 2016 were enough to create lasting damage on their long-term success, one health care organization says.

“We don’t know the exact financial situation for every hospital, but it’s tougher out there than folks might assume,” said Scott McIntyre, spokesman for the Iowa Hospital Association.


The state’s privatized Medicaid program today oversees health care coverage for nearly 623,000 poor and disabled Iowans, according to a January report from Iowa Medicaid Enterprises, a unit of the Iowa Department of Human Services.

Foxhoven said that, in first privatizing managed care in 2016, details — such as getting claims paid on time and obtaining prior authorizations — “needed to be ironed out.”

But now, the DHS director says the program is beginning to reduce costs by improving the health of Iowans — meaning they are regularly seeing a primary care physician and don’t need to make trips to the emergency room.

According to DHS data:

• Escalated member issues have decreased by 50 percent since state fiscal year 2017,

• Escalated provider issues have decreased by 81 percent since fiscal year 2017.

“What that’s telling us is we’re getting all those bugs worked out where we’re getting more satisfaction from our members, more satisfaction with our providers so that they feel all of those other issues are getting resolved and aren’t issues anymore,” Foxhoven said.

The two insurance companies that handle member coverage, Amerigroup Iowa and UnitedHealthcare of the River Valley, also saw a decline in grievances from the fourth quarter of fiscal year 2018 and the first quarter of fiscal year 2019. Grievances refer to any complaint or dispute that expresses dissatisfaction with how a member’s care was handled.

Appeals — a formal request from a member to the managed-care organization to take action on its decision to limit or deny services — increased between the two quarters. Those increase was driven by UnitedHealthcare, the managed-care organization that took the majority of members from AmeriHealth Caritas after the latter left the state’s program in late 2017.

AmeriHealth was not included in this count.

Gov. Kim Reynolds, during a Jan. 30 Gazette editorial board meeting, attributed recent success to two years’ worth of experience as well as an new actuary that can accurately measure costs.

“It’s not based on projections, it’s based on actual data,” she said.

During her campaign in this past year’s gubernatorial race, Reynolds vowed a hard stance on requirements managed-care organizations must meet in annual contracts — or face penalties.


“I’m not going to continue to travel the state and hear from people that are providing the services that they’re not getting paid in a timely manner. I made it very, very clear,” Reynolds said.


Some providers around the state agree that after almost three years in the program, they have found a rhythm in working through the managed-care system.

The day-to-day process to bill for services and obtain prior authorization has become easier in the sense that they understand how to best deal with the insurers.

“But at same time, there continues to be struggle to some degree,” the Iowa Hospital Association’s McIntyre said.

“Hospitals are doing what they can to make things works with the managed-care organizations. Their financial stability depends on it, and their ability to provide care depends on it.”

Financial instability from some managed-care policies has affected rural hospitals hardest, where more organizations are opting to cut back staff or close departments all together, McIntyre said.

“It does illustrate, kind of like a canary in the coal mine, that it’s difficult,” he said.

Since April 2016, when the managed-care program was debuted in Iowa, Medicaid has been top of mind for providers at the Village Community, a day habilitation facility in West Branch that cares for about 15 disabled individuals, all on Medicaid.


Nearly a year ago, their Medicaid reimbursement rate was cut in half by a new tiered rate system that gave members a fixed daily rate. But the provider at the time said the new rate was not reflective of the cost of the service they provide.

“We honestly have no idea what the long term looks like. After the bomb dropped last year, we were so blindsided, we can no longer predict what’s going to happen,” said Brenda Kurtz, one of the organization’s founders and member of its board of directors.

December, Kurtz added, was the first month in 33 months the Village Community has been paid “on time and in full without any issues or back and forth” from the managed-care organization with which it is contracted.

In the beginning

For many critics of the managed-care program, it goes back to how the program was rolled now nearly three years ago. Iowa Medicaid in 2016 moved the majority of its Medicaid enrollees into the hands of three managed-care organization all at the same time.

This created what Foxhoven later would describe as “bumps in the road” that continued for several months. Health care providers often complained they were being reimbursed for services incorrectly or receiving their payments later than expected. Patients said necessary services were unjustly limited or cut entirely.

“The reality is we knew and talked about the fact that rolling out managed care in the way that it was with such a large population, it invited bumps in the road,” McIntyre recalled. “It created confusion and problems for hospitals and all providers and recipients”

Reynolds echoed these sentiments went she met with The Gazette’s editorial board in January, and conceded managed care had been rolled out incorrectly when the majority of its enrollees were moved to the new system.

“I said that from the beginning,” Reynolds said. “It was not rolled out right. I can control what I can control and there not a day that goes by where I am not just saying that.”



Previous Gov. Terry Branstad had touted a key benefit of the program was that it was saving money.

Rob Sand, a Democrat who took office as Iowa State Auditor in January, said he intends to audit the program. He said the audit doesn’t answer questions about how much the managed-care companies owe providers for services.

Sand’s predecessor, Republican Mary Mosiman, issued an report in November stating the state saved $126 million in 2018.

On July 1, an insurer called Iowa Total Care — a subsidiary of Centene Corp., which became the country’s largest Medicaid health plans provider in 2015 — is slated to join the state’s program. DHS officials say they have been working with company officials to ensure they are ready to join Iowa managed care.

Providers, however, are leery of this upcoming change.

“With the new managed-care organization, it’s difficult to know if there will be a few bumps in the road, but there probably will be,” McIntyre said.

Reynolds said her office and other officials will continue to work to understand “how we can make this system better.”

“We’re going to continue to look for opportunity to streamline the process when I talk to providers,” Reynolds said. “... We’re going to continue to review the system, we’re going to continue to work with managed-care providers and the people that are providing the services and make sure they are getting paid on time, that we are working to make sure things are streamlined and easier.”

Des Moines bureau reporter James Q. Lynch contributed to this article.

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