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Back in April Iowa moved forward with privatizing its Medicaid program (something the vast majority of states have done).
The transition has been bumpy to say the least. As this sharp Des Moines Register op-ed from last week demonstrates: Don't pay managed care firms a penny more
Not entirely dissimilar from what happened to Kentucky when they did the same thing five years ago; they had to start over last year.
After months of protests, multiple delays from the federal government and a legal battle or two, Medicaid managed care is finally here.
On Friday, the state handed over management of its $5 billion Medicaid program to three out-of-state private insurers — AmeriHealth Caritas Iowa, Amerigroup Iowa and UnitedHealthcare of the River Valley. . .
But the move has been a controversial one — the Iowa Hospital Association asked a judge to delay the move; about 100 Medicaid recipients rallied at the State Capitol; and Iowa Senate Democrats have come out in fierce opposition.
The transition has been bumpy to say the least. As this sharp Des Moines Register op-ed from last week demonstrates: Don't pay managed care firms a penny more
Iowa’s Medicaid program was operated by the state for decades. With modest administrative costs and among the lowest per-patient spending in the country, it worked well.
Then along came Gov. Terry Branstad and his unpopular idea of handing over the government health insurance program to three for-profit insurers. While providing no reliable evidence, he insisted privatization would save the state money and improve the health of more than 600,000 Iowans who rely on Medicaid. On April 1, three managed-care companies took over the program’s administration.
These insurers signed contracts with the state, agreeing to cover the health expenses of Iowans in exchange for fixed monthly payment rates based on actuarial projections reviewed by both parties. The companies, including giant UnitedHealthcare, didn’t just fall off the health insurance turnip truck. They knew exactly what they were doing.
And within months, they were begging for more public money. In October, Iowans unexpectedly discovered the state agreed the companies could milk an additional $127 million out of the state and federal government.
One insurance executive wrote that without changes — such as paying the companies more or allowing them to cut benefits and reimbursement rates — privatized Medicaid may not be sustainable.
Great. The program should not be sustained.
It has been a disaster. Since privatization began, numerous Iowans have complained about everything from catheters to surgeries not being covered. Health providers have not been reimbursed for services, forcing them to borrow money or close their doors.
The state should not pay the private insurers a single penny more than what was agreed upon in the contracts. If the companies don’t like it, they can jump ship, bail out of the contracts, and Iowa can return to the state-run Medicaid that was a trusted, reliable payer of health services.
Because what MCOs are doing in Iowa looks eerily like what they’ve done in other states: Secure a state contract with agreed-upon payment rates and come back later to demand more and more taxpayer dollars. They attempt to essentially hold the state hostage.
Not entirely dissimilar from what happened to Kentucky when they did the same thing five years ago; they had to start over last year.
Appearing to concede to many of the concerns of health care providers and patient advocates over the past few years, today the Kentucky Cabinet for Health and Family Services (CHFS) announced they would rebid all of their contracts for Medicaid Managed Care Organizations (MCOs) to improve oversight and administrative processes.
Facing a $1.3 billion shortfall in 2011, Kentucky changed its Medicaid system from a fee-for-service model to managed care, in which private insurers receive a set amount of money from the state per patient to be used to directly pay health care providers. The transition to the new system was rocky from its inception, as it was inundated with complaints from patients who were denied treatment or had difficulty finding providers, as well from doctors and hospitals who found long payment delays, if not outright denials, from MCOs.
CHFS issued a new RFP today for MCOs to manage the health care services of 1.1 million Kentuckians who are on traditional or expanded Medicaid, and the new contracts will take effect on July 1. The contracts with the current MCOs — Anthem, Aetna (Coventry Cares), Humana (CareSource), Passport and Wellcare — will expire at that date.