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Iowa selects Molina Healthcare to be its third Medicaid managed care organization

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State officials say they intend to award Molina Healthcare the contract to be Iowa's third Medicaid managed care organization.

State officials have announced they have selected Molina Healthcare of Iowa to join the state’s Medicaid program starting next year.

In an announcement Wednesday, officials said they intend to offer the California-based company a contract to be the state's third managed care organization.

It will join the Iowa two current MCOs — Iowa Total Care and Amerigroup Iowa — and is expected to start providing services in July of next year.

State officials said they also intend to award Amerigroup Iowa another contract, extending its work with the state, which began when Iowa privatized its Medicaid system in 2016.

The two health insurance companies were chosen out of a pool of five bids total. The other three companies that placed bids were Aetna Health of Iowa, CareSource Iowa and UCare Iowa.

State Medicaid Director Elizabeth Matney said Molina was selected because it specializes in government programs and has demonstrated success with populations that need long term care and support.

"That's a population that is especially vulnerable to any type of transitioning care," she said. "And we really wanted to make sure that we were choosing an entity that had proven experience and demonstrated positive outcomes."

Molina Healthcare provides Medicaid services in 14 states and is entirely focused on government programs like Medicaid, Medicare and the Affordable Care Act Marketplace Plans, which state officials liked, Matney said.

Ultimately, the goal is to divide Iowa’s Medicaid members evenly between the three insurance companies, and the state is working to ensure that transition will go smoothly, she said.

"When we're doing our evaluation of each one of the managed care network adequacy, we're really looking at the possible population of providers that can be within that network and how many they're contracted with, because we do want to create that continuity," Matney said.

According to the state's most recent Medicaid quarterly report, which includes data from January to March of this year, 787,187 Iowans are on Medicaid under an MCO, with 57 percent under Amerigroup Iowa and 43 percent under Iowa Total Care.

An additional 45,000 Iowans are enrolled in the state's Medicaid program under Fee-For-Service, which is managed directly by the Iowa Department of Health and Human Services.

The state has not had a third MCO since AmeriHealth Caritas left the state in late 2017, about a year and a half after Iowa switched to privatized Medicaid.

Natalie Krebs is IPR's Health Reporter