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State Auditor's Survey Finds Medicaid Providers Dissatisfied With Privatized System

rob sand
Katarina Sostaric
IPR File
A survey done by the state auditor's office found many of Iowa Medicaid providers are dissatisfied with the privatized system

The majority of health care providers who participated in a survey by the state auditor's office do not think the state’s privatized Medicaid system has been beneficial for care.

According to a report released by State Auditor Rob Sand's office, the state sent out surveys to 2,592 of the state's 11,801 providers who are eligible for Medicaid services and have worked with the system both before and after its privatization in April 2016.

The surveys were distributed to a sample of providers across a variety of fields that was proportionate to their overall representation in the state. The department asked providers to compare the systems and provide information about payments and staffing under the state privatized managed care system from April 1, 2016 to July 31, 2019.

Of the 813 responses the state received, more than half said the privatization of the state’s Medicaid system has had a negative impact on quality and access to care as compared to the fee-for-service system the state previously used.

Just 6.1 percent of respondents said the system had benefited the quality of care, while 10 percent said it benefited access to care.

Additionally, 41 percent of respondents said they were "dissatisfied" or "extremely dissatisfied" with the privatized system’s impact on their ability to provide services to Medicaid patients. While a quarter said they were "satisfied" or "extremely satisfied."

At a press conference on Monday, Sand said the department did the survey to get an idea of how providers overall felt about the system.

"If you recall in 2016, when Medicaid was privatized, then-Gov. [Terry] Branstad said that it would decrease costs, improve access and improve quality," Sand said. "And this report is one attempt to take a look at access and quality as well as some figures related to cost from a provider perspective."

Sand noted that there were variations on in responses depending on the provider's field.

More than 60 percent of hospitals said they were "dissatisfied" or "extremely dissatisfied" with the managed care organization's ability to provide services compared with just 31 percent of chiropractors and optometrists.

He said one issue is that providers have to deal with a different billing system for each private insurance company.

"It'd be a better system, more efficient for providers who are on the ground, would let them focus more on actually providing care, if the state would standardize the reporting systems," Sand said.

The privatization of Iowa's Medicaid system under former Gov. Branstad has been controversial. Prior to the change, the system was run on a "fee-for-service" model where providers would submit claims directly to the Department of Human Services.

Currently two private insurers, Amerigroup and Iowa Total Care, manage the 700,000 Iowans on Medicaid. Providers are required to submit their claims to the company that has been assigned to their patient.

State Medicaid Director Mike Randol, who the DHS announced last week will be leaving his role in August, said in an email statement that his department "values feedback from all Iowa Medicaid providers" and has continued to "implement improvements to our Medicaid program based directly on their feedback."

"Our program also includes stronger accountability measures, and we withheld funds from an MCO that did not pay providers on time," Randol said. "Oversight of our managed care organizations (MCOs) is essential to ensuring providers are supported by timely and accurate payments so they can continue to provide critical care for Iowans."