Feds approve Iowa's Medicaid privatization, effective April 1

Iowa’s Medicaid program will shift to managed care for some 560,000 recipients on April 1, in accordance with waivers granted by the federal Centers for Medicare and Medicaid Services. CMS had previously denied the request from Governor Terry Branstad’s administration to privatize Medicaid by January 1, citing numerous signs that the state was not ready. In a letter the Branstad administration released today, Vikki Wachino of CMS noted “significant improvement” in several areas: the provider networks of three insurance companies picked to manage care for Medicaid recipients; plans for reimbursing out-of-network providers for services; better communication between state officials and Medicaid providers and recipients; and training of case managers to assist Medicaid beneficiaries during the transition.

I enclose below reaction to today’s news from the governor, key state lawmakers, and other stakeholders, as well as the full five-page letter from CMS to Mikki Stier, director for Medicaid in the Iowa Department of Human Services. Federal officials set several conditions on their approval of Iowa’s plans, such as monitoring the actions of the three managed-care organizations, making sure call centers are running their helplines competently, and preserving some “continuity of care” for Medicaid recipients.

Although the delay until April 1 will allow more time to prepare for the transition, the policy’s likely impact remains the same: more money for insurance company overhead and profit and less for health care services; a deterioration in care for disabled people, as seen in Kansas and other states; and less access to health care providers (a key issue for the three Iowa Senate Republicans who recently voted with Democrats to terminate Medicaid privatization).

Senate Democrats continue to push for “tough, bipartisan oversight and accountability protections.” Chelsea Keenan reported for the Cedar Rapids Gazette that the Senate Human Resources Committee will consider that bill (Senate File 2213) on February 24. I don’t expect that legislation to go anywhere. All I’ve heard from Iowa House Republicans is happy talk, backed up by no evidence, that privatizing Medicaid will save the state money and improve patient care.

Press release from Governor Terry Branstad’s office, February 23:

Branstad, Reynolds Announce Federal Approval of Medicaid Modernization

DES MOINES – Today, Gov. Terry Branstad and Lt. Gov. Kim Reynolds announced that the Centers for Medicare and Medicaid Services (CMS) has approved Iowa’s plan to modernize Medicaid. Iowa and CMS have agreed to an April 1, 2016 implementation date. The Administration’s letter to CMS can be found here. In a letter back to the Administration, CMS noted they had seen “significant improvement” and “significantly enhanced” provider networks. Iowa is moving to a managed care system, as 39 other states and the District of Columbia have done within their Medicaid programs.

“Our agreement with CMS gives certainty for our patients and our providers. It is time to move forward with a modern and managed Medicaid system. Nationwide, over 40 million Medicaid patients have managed care. Here in Iowa, for more than 20 years, portions of our Medicaid population have received managed care. Now we can work together towards successfully bringing the benefits to all our Medicaid patients. We’re pleased that CMS has approved Iowa’s plan to provide a better system for Medicaid patients on April 1,” said Branstad. “Iowa is ready for a new system that provides access through more doctors and will create a more sustainable Medicaid program for taxpayers.”

Lt. Gov. Reynolds concurred saying, “We’re glad to see that CMS saw past the partisan politics and put patients and providers first. The agreement with CMS gives Iowa full federal approval to move forward. We have already begun working on implementing modern managed care for Iowa Medicaid patients beginning April 1. We know that this modernized Medicaid system is the right way to provide a better health system focused on outcomes for Medicaid patients.”

Managed care means better access for patients to doctors. Iowa’s Medicaid patients and providers will have greater access to a robust provider network. Through managed care, Iowans’ health care delivery will improve by offering preventive services above and beyond what currently is available, through reducing emergency room visits, hospitalizations and surgeries, and eliminating unnecessary or duplicative services.

Statement from Iowa Senate Democrats, February 23:

“Now, more than ever, we must all work together for robust oversight”

Comments by Senator Liz Mathis of Robins, chair of the Senate Human Resources Committee, and Senator Amanda Ragan of Mason City, co-chair of the Health and Human Services Budget Subcommittee, on the decision by federal Centers for Medicaid Services to allow the Branstad Administration’s plan to privatize Iowa Medicaid to go forward on April 1.

“We are thankful another month of delay. Families living with severe medical challenges, the people affected most directly by Iowa Medicaid privatization, know it is far from ready,” said Senator Amanda Ragan of Mason City, co-chair of the Health and Human Services Budget Subcommittee. “Iowans still can’t get answers to basic questions. Iowans are being told trusted local doctors and service providers won’t be available. Iowans are losing independent case managers paid to put patients first.”

“Now, more than ever, we must all work together for robust oversight,” said Senator Liz Mathis of Robins, chair of the Senate Human Resources Committee. “The Senate is working on tough, bipartisan oversight and accountability protections. Iowans will do a better job than out-of-state corporations when it comes to overseeing the health care safety net we all depend on.”

From the Des Moines Register’s report by Tony Leys and Jason Clayworth:

House Speaker Linda Upmeyer, a Clear Lake Republican, praised the news. “I am optimistic that the move to managed care will bring more predictability to the Medicaid program, while also improving the health and well-being of the patients it serves,” she wrote Tuesday afternoon. “House Republicans will continue efforts to assist those affected by the transition to ensure that Medicaid patients continue to receive high quality healthcare. It is clear that (federal officials) was able to see through the politics of this transition, and recognized that Iowa’s program is ready to move forward with providing the healthcare and services that Iowans expect.”

Amy McCoy, a spokeswoman for the Iowa Department of Human Services, said her agency would continue to manage the program through March before turning it over to the private companies. All participants should have been notified which company they’re assigned to, she said. They’ll now have until June 16 to change to another plan for any reason, she added.

Rep. Dave Heaton, a Mount Pleasant Republican who helps lead health-care discussions, predicted many health-care providers will now sign contracts with the private management firms. “A lot of them I think were holding off, uncertain of whether or not there would be a move toward managed care. Now since that date’s set, I think a lot of the providers that have held out will be signing contracts,” he said. “I’m really relieved to know now that we’re going to go forward. I expect some bumps in the road in the next year in its implementation. But I really feel that the people who are receiving service today will continue to receive their services.”

Iowa Democratic Party press release, February 23:

DES MOINES – IDP Chair Dr. Andy McGuire issued the following statement in response a decision today from the Centers for Medicare and Medicaid Services to delay implementation of the Branstad-Reynolds administration’s Medicaid privatization plan for the second time, from March 1 to April 1:

“I would like to commend Democrats in both the House and Senate who listened to Iowans’ thoughts and concerns for many months now on Medicaid privatization, and stood firmly opposed to this rushed and reckless plan. Democrats fought tirelessly to ensure every Iowan has access to quality health care, and that is a fight we will continue every day moving forward.

“I also thank all the patients, advocates and caregivers who voiced their serious objections and concerns with Medicaid privatization. Democrats will continue to ensure your voices are heard and that proper oversight is put in place.

“It is telling that this plan has now been delayed for the second time, despite many assurances from the Branstad-Reynolds administration that the transition was ready to go. It is now incumbent on the Branstad-Reynolds administration and Republican lawmakers to actually listen to the people of Iowa and make certain that this transition takes place as smoothly as possible and does not interrupt care or services.”

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