Tensions Still High Five Months Into Medicaid Privitization

Aug 30, 2016

Medicaid providers and recipients criticized the privatized management of Iowa's Medicaid system at the state capitol Monday.

Governor Terry Branstad says there is less waste, fraud and abuse when Medicaid is run by private companies. But critics contend that poor administration of the program by three for-profit Managed Care Organizations or MCOs is harming the quality of life of low-income and disabled Iowans.

One of the speakers was Lori Elam, a court appointed guardian in Davenport. Elam says her ward, Frank, has been using the medication management service at Vera French Community Mental Health Center for years. But recently, Frank's MCO said recently it would not reimburse for this service.

"I was told that Frank has two options. One, switch to a new MCO, but that in of itself creates a whole other list of problems," " says Elam. "Finding doctors, transferring records, and he loses case management. Or he goes without the service. That is not acceptable." 

Primary concerns centered on late Medicaid reimbursement payments and higher administrative fees for providers, which critics say has resulted in fewer available services.

Derek Laney is the CEO and Program Director of Iowa Focus, which provides home and community based services to Iowa's long-term care population. He says administrative time and expensive have increased by 25 percent this summer due to privatization, and that's not all.

"Despite our administrative increases, today we remain short $78,000 from payments over a four-month period," says Laney. "Every single one of those claims is either unpaid or incorrectly budgeted, due to an MCO error on our contractual rate or on a service authorization."

Later in the day, lawmakers gathered to discuss the first quarter of data Iowa's Department of Human Services's Medicaid division has collected since Medicaid management was privatized. The data is self-reported by the MCOs, and has yet to be independently verified. 

One issue is that two of the MCOs are falling short of a benchmark that requires all prior authorizations be completed within seven calendar days. Five percent of the AmeriHealth claims, and 32 percent of the AmeriGroup claims were not approved in a timely manner during the months of April, May and June. 

"We are working with both the managed care organizations to insure that those numbers go up," says Liz Matney of the state's Medicaid division. "And in fact in July, and August with AmeriGroup we've seen great improvements so far."

One of the report's successful metrics is that all grievances and appeals are resolved within 30 and 45 days respectively. But since grievances and appeals only come from Medicaid recipients, lawmakers question whether the data presented was reflective of the issues providers are encountering.

"Individuals are saying they have not received payments for four months," says State Rep. Cindy Winckler, a Democrat from Davenport. "I have trouble reconciling the difference between what we hear and what this data is telling me."

Kim Foltz, CEO of MCO UnitedHelathcare’s Iowa plan, told lawmakers that there are success stories. Though people may be less inclined to speak up when they’re content with Medicaid services.

“I literally got a message from one of our members yesterday, that she could not say enough good things about her case manager Tiffany,” says Foltz. “We have those positive stories, those people don’t come to these sessions.”