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DES MOINES — The manner in which health care is delivered to more than a half million low-income and disabled Iowans is undergoing a vast transformation.

Proponents say shifting management of Iowa’s Medicaid program to private organizations will lead to better patient outcomes and reduced state costs.

But many are concerned the change will upset patient care.

“My biggest concern right now is that very vulnerable Iowans are going to find themselves not getting the services they need,” said Iowa Senate President Pam Jochum, a Democrat from Dubuque whose adult daughter Sarah has intellectual disabilities.

Iowa spends $1.9 billion each year providing Medicaid services to 560,000 residents, according to state data.

The state says the costs of administering the Medicaid program are growing at an unsustainable rate: 73 percent since 2003 and a projected 21 percent over the next three years.

A large driver of that growth, state officials say, is the Medicaid expansion the state agreed to in 2013 under the federal health care law. That is expected to add 150,000 new patients to Medicaid and $1 billion in state operating costs.

“That’s an unsustainable amount of growth,” Iowa Department of Human Services spokeswoman Amy McCoy said. “We had to look at the program and see where we could find efficiencies.”

So Gov. Terry Branstad and Human Services director Chuck Palmer announced in February the state’s plan to contract with managed care companies to administer what is, with federal funding included, a $4.2 billion-per-year program.

State officials estimate they will save more than $50 million in the first six months of 2016, when the move is complete. They also think managed Medicaid will result in better, more streamlined access to services and a better quality of outcomes, while insisting covered services will not change.

Instead of having separate care organizations for physical health, mental health, transportation and any other services, the expectation is to unite patients’ health care delivery under one system. State officials also think more focused, preventative care will reduce expensive hospital and emergency room visits.

“We’re all anticipating good results, especially for (Medicaid) members,” McCoy said. “It’s not just a budget move. … It’s a good move to make.”

The concerns

But change is not easy, Palmer said at a recent legislative meeting at the Iowa Capitol, and many are hesitant to embrace the transition, for many reasons. They worry the quality of care will decline, wait lists will grow or patients will lose case managers assigned to oversee their treatment.

“The concern is loss of services, especially waiver services,” said Jane Hudson, executive director of Disability Rights Iowa, referring to the Home and Community-Based Services waiver program, which provides long-term services.

Where a patient may go to air grievances is another common concern.

Currently, Medicaid patients may use the state Ombudsman’s office to raise concerns over the quality of care. But Iowa Ombudsman Ruth Cooperrider said she is not certain her office will have that same authority over private businesses.

“I don’t know if (the state’s plan) is a good thing or a bad thing. My concern is more in terms of how it may affect our office’s ability to assist citizens or providers of services if they have concerns about a particular case,” Cooperrider said. “If the program is privatized, what mechanisms or what process will be in place for those people and who can they turn to (for assistance) is the question that we have.”

McCoy said patients will still have the option of the appeals process currently available through the state.

But Hudson said the new program should include an independent ombudsman, someone who works neither for the state nor the managed care organization.

McCoy said that is an option the state is considering.

“If this Medicaid program gets privatized, I think we (Cooperrider and Hudson) both agree it’s important to have an independent and impartial entity outside the providers and even outside of the Department of Human Services,” Cooperrider said, “to help people navigate and advocate for them if they have concerns or problems.”

Some also worry about personalized case managers, who work closely with Medicaid patients. Such case managers may continue to serve patients until June 2016, at which point the managed care organizations will assume control.

Some worry the state is acting too quickly by implementing such a broad change in less than a year.

The example

Rocky Nichols watched closely as Kansas underwent a similar transition with its Medicaid program. The executive director of Disability Rights Center of Kansas, Nichols said Iowa can learn from what he thinks were mistakes made in Kansas.

Nichols agreed that an independent patient’s advocate should be established. And he noted the importance of oversight and accountability in the transition.

“Just accountability, making certain that the data that they’re requiring, the outcomes that they’re requiring, the information it’s requiring from managed care organizations,” Nichols said. “That really needs to be vetted and approved by disability stakeholders, because if they don’t have ownership over the outcomes and the expectations of managed care companies, I think you’re setting the process up to not be successful.”

Nichols also said Iowans should demand continued delivery of services under the Home and Community-Based Services waiver program.

“Imagine you’re a person who is in a car crash,” he said. “In our nation, if you live long enough, (the odds are) you’ll acquire disability private insurance, which typically won’t fund the personal assistance you need to get out of bed, to help you shower in the morning, to help you transfer from your power chair to the toilet, to do the things of daily living. …

“That’s all provided through (Home and Community-Based Services) waivers.”

The future

Managed Medicaid is not new to the country. Roughly 70 percent of Medicaid enrollees nationwide are served through managed care delivery systems, according to the federal government. And 39 other states contract with managed care organizations, according to Iowa officials.

It’s not even new in Iowa, where Magellan provides mental health services and Meridian provides primary, acute and specialty services.

But managed Medicaid is new to most Iowans on the program.

“Most of the Medicaid population’s care isn’t coordinated right now,” McCoy said. “But moving it to private (organizations), doing it that way — many other states do it that way — we believe everybody has a chance to benefit from this, Medicaid recipients and the taxpayers of Iowa.”

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