Managed Care | Year One The Iowa Medicaid program sees successes, and continued challenges

April 1, 2017 | 11:27 am
Kim Folz, Health Plan CEO of UnitedHealthcare Community Plan of Iowa (from left), Cynthia MacDonald, Plan President of Amerigroup, Cheryl Harding, Market President at AmeriHealth Caritas of Iowa, and Mikki Stier, Division Administrator of the Iowa Medicaid Enterprise, answer questions during the inaugural Health Policy Oversight Committee meeting at the State Capitol in Des Moines on Monday, August 29, 2016. During the meeting, a group of administrators reported on the first quarter of data on the Iowa Health Link managed care transition and managed care organization leaders answered questions about claims and processes that have held up the transition to managed care. (Rebecca F. Miller/The Gazette)
Chapter 1:

Year One

It’s been one year since the state handed over its Medicaid program with nearly 600,000 poor and disabled Iowans to three private insurance companies.

What a year it’s been.

Providers ran into billing issues, complaining that the insurers were not paying them properly or on time. AmeriHealth Caritas Iowa, Amerigroup Iowa and UnitedHealthcare of the River Valley all lost more than $100 million during their first year of operation.

And most recently, the state of Iowa has opted to enter into a risk corridor agreement — in which the government steps in to help protect insurers from unexpectedly high losses by paying the difference if an insurer spends more in medical care than it collects in revenue. The price tag for the state is $10 million, with another $225 million from the federal government.

“The first year has been spent trying to resolve mechanical issues — prior authorizations, payment and contract issues. We could do well to spend more time next year helping the MCOs understand the services we provide in the community.”

- Dan Strellner

President, Abbe Inc.


It hasn’t been all negative — 238,000 Medicaid beneficiaries have received a health risk assessment, which gets them targeted care coordination earlier; the state has worked to put out quarterly reports showing if MCOs are meeting previously agreed upon benchmarks; and the state reports that hospital admissions and readmissions are down for the Medicaid population.

The Gazette spoke with a number of different stakeholders about the first year of Medicaid managed care as well as their hopes for year No. 2.

The three managed-care organizations either declined request for an interview or did not respond to The Gazette’s request.

The State Capitol building is shown in Des Moines on Tuesday, January 13, 2015. (Adam Wesley/The Gazette)
Chapter 2:

State of Iowa

Gov. Terry Branstad has touted the program’s $110 million in savings — which are being calculated through actual Medicaid costs versus predicted costs had the state not moved to managed care — saying as recently as this past Monday that the transition was the right move, especially in a tight budget year.


Gazette timeline

“If we hadn’t had the courage to do this despite the criticism from some, they would have a much bigger budget problem,” he said.

Department of Human Services officials acknowledge there have been bumps along the way — specifically with provider payments — but believe that the collaboration among the state, insurers and providers as well as the amount of oversight and data collected are all reasons to be celebrated.

“It’s been a team effort to really work in collaboration to ensure members get the care they need in the right time and right place,” said Iowa Medicaid Enterprises Director Mikki Stier. “We had challenges, but we have worked to resolve that.”

The state has made decisions that were not always well received. Increasing rates by $33 million in October to better cover the Medicaid expansion population as well as rising prescription drug costs and the risk corridor announcement were two of the biggest.

But those were necessary to keep a sustainable program, officials said. They also are not out of line with actions other states with Medicaid managed care programs have taken.

Amy McCoy, DHS spokeswoman, said the federal Centers for Medicare and Medicaid Services has recouped $7 billion in risk corridor payments across the country. Risk corridors “put in place that guardrail for the health plans and tax payers,” she said.

The state also has been collecting a significant amount of data from the insurers to keep tabs on the care provided and to measure outcomes, including the amount of health risk assessments done, the number of care coordinators assigned and emergency room use.

Without a full year of data, it is difficult to draw conclusions just yet as to whether outcomes have improved, said Liz Matney, the state’s managed care director. But there are positive signs — hospital admissions are down 54 percent and readmissions between 15 and 60 days are down 2 to 23 percent, she said.

“We expect to see a positive impact as we continue to gain experience,” Matney said.

Iowa State Senator Joe Bolkom (right) asks a question during an out-of-session Human Resources Committee meeting on the Medicaid transition at the Iowa State Capitol in Des Moines on Tuesday, July 26, 2016. (Liz Martin/The Gazette)
Chapter 3:

Ombudsman and Senate Democrats

Under Medicaid managed-care oversight, the state created the managed-care ombudsman office to advocate for the more than 57,000 Iowans living in a health care facility or receiving waiver services.

“I think it’s very important that members have an independent voice with (Iowa Medicaid) and the MCOs,” said Deanna Clingan-Fischer, Iowa’s long-term-care ombudsman. “Someone who can be above undue influence, who is truly looking out for interest of the member.”

As the first year progressed, call volumes increased, she said. Monthly reports show that calls rose from about 143 in April 2016 to 335 in February 2017. Access to services and benefits were among beneficiaries’ top concerns, she added.

John McGlothlen / The Gazette

“It’s a laundry list of things — hours were cut back, prior-authorizations, access to medication ... access to things member need for quality of life or services itself,” she said.

Clingan-Fischer’s office serves as a liaison among the Medicaid members, the state and the MCOs, working to direct the members to appropriate resources, listen to their stories and concerns, and resolve the issues either informally or formally.

“We have an 89 percent resolution rate,” she said. “On things we can’t resolve, we continue to work on that on a more systemic level as it may be impacting more members.”

One of the most vocal groups opposed to the Medicaid move has been the Senate Democrats — they pushed for legislative oversight, held public forums on the matter throughout the state and called meetings throughout the 2016 legislative session where they questioned the MCOs and DHS on the transition’s progress.

Now in the minority after November’s election, they’ve had to approach things differently. They’ve asked Republicans in leadership to schedule oversight meetings, including this past week, said Sen. Amanda Ragan, D-Mason City, but it still hasn’t happened.


“Bumpy is the mildest word I can come up with” to describe the first year of Medicaid managed care, she said, pointing to provider payment problems, stories she’s heard from beneficiaries who have seen services denied or cut, and a new contract dispute between AmeriHealth Caritas and the Mercy Health Network.

Ragan, along with Sen. Liz Mathis, D-Cedar Rapids, spent much of the first year speaking with different stakeholders — providers, the MCOs and beneficiaries — to put together a piece of legislation that could address some of the issues people ran into the first year.

“I’ll give a lot of credit to Mikki (Stier) and Director (Charles) Palmer,” Mathis said. “They have solved many, many issues for us. But does that mean every constituent needs to call their legislator to get medical bills paid?”

The bill touched on a number of concerns, including allowing for single case agreements so certain beneficiaries can keep their case managers; more timely notices to be sent to providers; and creating more uniformity among the MCOs for appeals, grievances and denials among other items. But the bill failed to make it out of a committee before the first legislative deadline that kept bills alive.

“Unfortunately it was ignored,” Ragan said. “It was an opportunity to improve things, and I’m disappointed it didn’t get a fair hearing.”

Kevin Moser (from left), sales at JVA Mobility, talks about the features in a new wheelchair for Zach Davis of Marion at his house in Marion on Friday, July 29, 2016. (Stephen Mally/The Gazette)
Chapter 4:


Even before Medicaid managed care took effect, the state’s providers had serious concerns. They felt the timeline was too rushed, which forced many to sign contracts with insurers before they were able to hammer out the details.

Then, starting as early as June, Medicaid providers started to experience billing issues, reporting late or inaccurate payments. It’s a problem that persisted throughout this first year as insurers worked to properly load fee schedules into their systems and better train providers.

But even today, 12 months into the program, providers report that they still run into reimbursement problems — some have dipped into savings, others have gone to the bank to ask for an extended line of credit and some are making even tougher decisions, including whether they should continue to accept a certain MCO or continue offering a particular service.

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After almost on year of receiving improper payments from the Medicaid insurers for specialty equipment, Cedar Rapids durable-medical-equipment provider JVA Mobility is considering discontinuing that service for Medicaid enrollees. The company provides wheelchairs, gait trainers and other equipment.

“There are no issues where there are fee schedules,” owner Vince Wolrab said. “But with specialty equipment, we are running into more and more problems.”

That’s because, when it comes to customized equipment — a wheelchair with a special seat, for example — insurers are not paying JVA Mobility anywhere near the prices the company received under the state-run Medicaid program, which was about 85 percent of the retail price, Wolrab said.

“The MCO will pay anywhere from seven cents on the dollar to 70. It can be the exact same company, and we use the same exact code, but there is no rhyme or reason.”

On items where insurers pay JVA Mobility below 50 percent of the retail price, the company is losing money.

“We’re dragging our feet with customers because we hope this will get fixed, but we can’t afford to get some of the equipment they want,” Wolrab said.

Continued billing problems with Amerigroup have pushed one physical therapist to consider dropping the insurer. Medicaid patients only make up between 10 percent to 15 percent of River Rehab Physical Therapy’s patients, but they disproportionately create the largest number of problems, said Aaron Eversmeyer, owner of the outpatient clinic in Muscatine.

And since Jan. 1, those problems have become even larger. Physical therapists moved to a new set of billing codes — and while Amerigroup can no longer accepts the old codes, the insurer hasn’t updated software to accept the new codes, either, Eversmeyer said.

“Ultimately, unless something changes, we as a group (of physical therapists) should come together and say we won’t accept patients. If that makes patients switch, so be it. We’re getting close to that,” he said.

AbbeHealth, which provides mental health and aging services to about 20,000 people in nine counties, including Linn, has hired two full-time employees to do nothing but chase Medicaid claims disputes and payment issues, said Dan Strellner, the organization’s president.


Strellner said the organization has developed good relationships with the local liaisons for the three MCOs. But even still, AbbeHealth still is receiving inaccurate payments and having services denied despite them being in the contract. Strellner said AbbeHealth’s accounts receivable — the money owed to it — are about 40 percent higher than when Medicaid was a state-run program.

AbbeHealth also has lost about 25 staff members to the insurers and seen a significant hit to its case management services — Amerigroup and UnitedHealthcare offer those services in-house and AmeriHealth announced in February that it would begin to do the same.

“The first year has been spent trying to resolve mechanical issues — prior authorizations, payment and contract issues,” Strellner said. “We could do well to spend more time next year helping the MCOs understand the services we provide in the community.”

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Chapter 5:

By The Numbers