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Lawmakers: Iowa Medicaid 'approaching a crisis'

Lawmakers: Iowa Medicaid 'approaching a crisis'

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As Iowa enters its second year of privatized Medicaid managed care, every Iowa Senate Democrat, plus one independent, has called on the federal government to step in, saying the state is “approaching a crisis.”

Senate legislators sent a letter last week to the Centers for Medicare and Medicaid Services, urging its officials to do a field visit to the state “so that you can learn firsthand about the problems that providers and Medicaid beneficiaries continue to experience,” the letter states.

“Hospitals, nursing homes and other Iowa health care providers — especially in Iowa’s small towns and rural areas — are telling us it’s not working,” the Jan. 24 letter states. “They are strapped with delayed or reduced payments, red tape and bureaucratic nightmares that are putting them in financial jeopardy.”

Sen. Liz Mathis, D-Hiawatha, told The Gazette Thursday the visit would allow CMS officials to see for themselves the impact the switch has had on providers and members, instead of receiving information solely from managed-care organizations or the Iowa Medicaid Enterprise.

“I think it’s important for them to hear from providers and members, especially the members,” Mathis said. “ … We just wanted to make sure if they should come to Iowa, we want them to talk to the people who are on the ground, doing the work each and every day and hear about the hurdles they are having in delivering services to the people who need it most.”

Mathis said no word has come from CMS if such a field visit would take place.

Iowa’s Medicaid program, which covers 600,000 members, was left with two insurers — Amerigroup Iowa and UnitedHealthcare of the River Valley — at the beginning of this year after AmeriHealth Caritas exited the market, citing financial strain.

UnitedHealthcare took the majority of AmeriHealth’s members after Amerigroup announced in December it could no longer accept new members. The other enrollees were moved to the state-run fee-for-service program.

Federal officials had delayed the start of Iowa’s Medicaid program to managed care organizations twice, citing readiness problems that included inadequate provider networks and an insufficient communication plan.

It was launched in April 2016.

The lawmakers sent the letter less than two months since Michael Randol took over as Iowa’s Medicaid director.

Before coming to Iowa, Randol spent five years heading up Kansas’s Medicaid program. He left that post as Kansas sought insurers to establish a new, federally ordered version of its privatized Medicaid program for this year.

The three private insurance companies that administer the KanCare program lost $110 million in its first year.


The Iowa legislators’ Jan. 24 letter, which includes the signatures of every Senate Democrat as well as Independent David Johnson, notes that senators held a conference call with CMS officials on Jan. 3 to discuss managed care.

During that call, Mathis said the officials said they would consider a field visit if they were provided with data on the state’s system.

Reports from three provider networks were attached to the letter sent to CMS last week, including Iowa Providers Association, Iowa Hospital Association and Iowa Behavioral Health Association.

Each of the reports from the networks, per the request of the legislators, included data on the financial impact managed care has had to statewide health care providers as well as anecdotal examples of hurdles they have faced since 2016.

According to the report from the hospital association, shortly after Medicaid switched over from the state-run program, “and despite a 90-day delay issued by (CMS) due to the state’s lack of readiness, hospitals across Iowa began to experience significant administrative burdens and financial distress.”

The hospital association, which represents all the state’s hospitals, stated that the elimination of Iowa Medicaid’s previous reimbursement process has resulted in about $7 million in payment reductions to all of the state’s 82 rural critical access hospitals.

The Iowa Behavioral Health Association claimed its outstanding balance at the end of fiscal year 2017 from all three managed-care organizations was nearly $18,500.

The reports also indicated repeated denials of payments from the managed-care organizations due to a lack of authorization, as well as processing errors on the part of the insurers.

The Iowa Providers Association report said it has added two full-time staff members to handle increased claim denials and the administrative roles of its Integrated Home Health program.

“As an agency, we have discontinued our traditional Intensive Outpatient Program in light of the requirements for prior authorization, the low reimbursements and the amount of clinician time spent in administrative/clerical duties in order to gain insurance approval,” the Iowa Behavioral Health Association report stated.

If federal officials do not conduct a field visit, Sen. Mathis said she hopes they can analyze the data sent to them from the three provider networks’ reports.

“Regardless if they don’t come to Iowa, we still want to have that conversation about their reactions to the data that we sent them,” she said.


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