Report highlights Iowa Medicaid horror stories; oversight bill languishes

Complaints to the Iowa Office of Ombudsman regarding privatized Medicaid increased by 157 percent last year, reflecting “systemic frustration” over cuts to health services for patients and unpaid bills for providers. Ombudsman Kristie Hirschman has “yet to be convinced” that the Department of Human Services is providing “adequate oversight” of the private insurance companies that control access to care and reimbursements, she wrote in a report released on April 2. The three outrageous examples she recounted resemble too many other tragic cases since Iowa shifted to a managed-care model for more than half a million Medicaid recipients.

Hirschman has assigned a full-time staffer to handle Medicaid-related complaints. The same issues come up again and again, more than a year after she, the state’s Long Term Care Ombudsman, and the advocacy group Disability Rights Iowa informed the DHS director about recurring problems with Medicaid managed-care organizations.

Although the ombudsman praised the legislature for “taking steps to correct some of the problems we and others have identified,” Senate Republican leaders haven’t brought up a Medicaid oversight bill that passed the Iowa House unanimously last month.

Here’s the full annual report for 2017 from the Iowa Office of Ombudsman.


This shameful story appears on page 1 of the ombudsman’s report.

The provider of an 80-year-old woman with several medical conditions called us after her approved hours of care were reduced, despite no improvements in the woman’s condition. The woman needs support hose for peripheral vascular disease and high blood pressure, but also has osteoarthritis and is physically unable to pull the hose on or take them off.

The patient’s home health aide had been visiting her twice daily to assist her with the hose and provide other services. But her MCO decided to approve only one visit a day.

When we asked the MCO to explain the reduction in services, it said that two visits a day were not medically necessary. We asked whether the patient was expected to abandon the support hose as a treatment or leave it on all day. The MCO never responded to our question. We suggested that the patient and her health aide appeal the MCO’s physician reviewer’s determination.

The MCO denied the woman’s appeal at the first step. She then filed a second appeal to an independent administrative law judge (ALJ) who works for the state. While the patient worked through her appeals, she left her support hose on for 24 hours a day, which she said caused her pain and interfered with her sleep.

Eventually, after a hearing, the ALJ sided with the patient and reversed the decision of the MCO to cut the home health aide’s visits in half. The ALJ noted that the definition and requirement for services payable under the Medicaid program had not changed since July 2016, and there was no proof that the patient’s needs had changed. The patient’s provider had testified during the hearing that a mechanical device would not assist her in getting the support hose on or off. The provider also argued that helping her patient with the hose at home would keep the woman out of the hospital.

The MCO did not file an appeal of the ALJ’s decision, and the head of a state agency overseeing the MCOs signed off on the decision.

Nevertheless, less than three weeks later, the MCO denied the patient’s request to preauthorize two more months of the home health aide’s visits. The MCO’s refusal to continue services at the same level likely guarantees that the patient and her provider will be caught in a revolving appeal cycle for the same issue, again and again.

In our view, the MCO’s position on the matter was stubborn and absurd, and it makes a mockery of the fair-hearing appeal process.

This was no isolated case. Jason Clayworth reported earlier this year,

A Des Moines Register investigation into those 200 cases found an appeal process that presents a thicket of administrative and legal roadblocks to patients and their families, who must clear hurdle after hurdle to secure care.

Specifically, the Register investigation found:

• Due process violations: In at least four cases, administrative law judges concluded or the Medicaid recipient alleges in ongoing district court appeals that the companies failed to properly notify recipients about health care reductions and their appeal rights.
• Denials of in-home care: Medicaid expenses for in-home care that had been routinely approved when the state ran the program are now being rejected by managed-care providers as unnecessary and outside the scope of what the program authorizes. Families say they are left struggling to care for their loved ones, who are losing their independence and autonomy.
• Endless appeals: Even when Medicaid patients win their cases in administrative hearings, the managed-care companies routinely “re-evaluate” their health needs, again denying their care in as little as 60 days. That forces patients to embark on yet another round of appeals.

“The denial of care for Medicaid services, especially those who had already been approved through the state, is an endemic problem in Iowa,” said Jen De Kock, a Des Moines attorney who represents the family of a suicidal teen who repeatedly was denied placement at a psychiatric medical institution for children.

The Ombudsman’s report recounted this story on page 2:

A woman who provided in-home care to her brother-in-law, a quadriplegic, contacted us after she was told that the number of hours she could be paid for her help would be cut from 177 per month to 45. The Consumer Directed Attendant Care (CDAC) services she provided allowed the man to remain in a home setting rather than a nursing facility. The patient needed daily assistance with bathing and grooming, dressing, general housekeeping, and meal preparation. He also needed the services of a home health aide multiple times per week to change his catheter and to provide other services his sister-in-law could not perform.

When we questioned the MCO and the state office that oversees Medicaid about the reduction, they said they were concerned that there was a duplication of services between the sister-in-law and the home health aide. Nevertheless, they insisted that no final decision had been made on the matter, adding that the patient would receive an official notice of any changes.

A month and a half later, the MCO informed us that the cut in hours had been decided: the man would receive care for only 51 hours a month—less than one-third of what he previously had. Although the family had not initially received an official notice as officials had promised and is required by federal law, we urged him and his family to appeal the decision.

The following week, the man entered the hospital to have a kidney removed and spent a week in recovery in a nursing home. Shortly thereafter, his family informed us that they would not appeal the drop in CDAC hours and had decided instead to let the man remain in a nursing home. The family made it clear that the MCO’s decision to reduce CDAC services was instrumental in its decision to have the man remain in the nursing facility.

We made our displeasure known to state officials overseeing the Medicaid program. It seemed ludicrous to us that a 71 percent reduction in the man’s monthly services was justified, especially since the MCO had not cited any evidence that the patient’s condition had improved. We also questioned whether the man would have received notice of the reduction in hours had we not been involved. This is not the only case we have reviewed where patients did not know that such a drastic change in care would occur.

Ironically, the decision to remove the man from his home and family has been more expensive for taxpayers. At-home care had cost the state $3,735 per month, according to the man’s family; the nursing home costs a minimum of $5,550 per month, plus doctor’s visits, medications, and supplies.

Clayworth’s investigative report discussed Nathan McDonald, who filed a lawsuit after his MCOs reduced his “in-home medical service visits to five times a week, rather than the twice-daily visits he had received since 2015 to help him live independently. AmeriHealth’s Dr. Brian Morley testified that it wasn’t necessary for McDonald to receive daily assistance to clean himself after bowel movements.”

A different Des Moines Register story by Clayworth from last August focused on Todd Mouw, who died only a few months after losing the in-home care he had received without incident for many years.

Todd Mouw’s problems began in March.

That’s when Amerigroup, one of three companies hired in 2016 to manage Iowa’s Medicaid program, notified the family that it was terminating a longtime waiver that allowed some of Mouw’s in-home workers to assist in such tasks as tracheostomy care.

Although some of the health provider firms and their employees had for nearly two decades provided Mouw’s care and equipment, Amerigroup said they no longer considered the workers qualified.

Amerigroup instead required registered nurses to provide some of the services that had for years been provided by home-health aides. […]

When Cyndi Mouw thought she had identified potentially qualified workers, she said weeks of administrative delays resulted in repeated missed care for her husband. […]

In May, Todd Mouw developed pneumonia and was hospitalized.

Although he initially improved, he was never able to return home for lack of in-home workers.

Instead, he was sent to a facility in Sioux Falls, S.D., that specialized in respiratory ailments. He died at the facility about six weeks after he arrived.


Journalists have documented widespread problems with reimbursements to companies serving Medicaid recipients. Some providers have gone out of business or laid off staff. Republican State Senator Thomas Greene told constituents in December, “I do not have one provider in southeast Iowa that has said this has been a positive measure.”

The ombudsman’s report includes one snapshot on page 2.

A company that provides care to Medicaid patients contacted our office in September 2016 because it was having difficulty obtaining rate agreements for services it provided to members with high needs. Despite a delay, the agreements were eventually signed.

Only a month had passed before the provider contacted us again— this time, because it had not yet received any payments from the MCO. After we initiated communication, the MCO assured us that the claims would be processed and the company would be paid within seven to ten business days. The company was finally paid $141,000 for its initial work, but said that was $165,000 short of the full amount owed.

Before we could get the discrepancy ironed out, the shortage continued to grow. By January 2017, the provider claimed the MCO was more than $289,000 behind in making timely payments. The MCO denied that the amount owed was that high, and even after the two sides reviewed spreadsheets, a resolution could not be reached.

We set up a meeting in March 2017 with the provider, the MCO, and state officials who oversee Medicaid. At the meeting, the MCO said the provider needed to re-bill for many of its past claims. The provider said this was the first time they had been told to do this. The provider re-billed, but the MCO had to manually re-process the billings. Some claims continued to be denied—in error. By May 2017, the discrepancy had dwindled but still approached $50,000. We continued to work with both sides and were finally able to close the complaint in February 2018 with all claims paid.

Not only do such reimbursement problems hurt providers, persistent unpaid bills have also disrupted care for patients. Tony Leys reported last September on Ana De La Cruz, a quadriplegic who required ventilator services.

For the past two years, she lived at Fleur Heights Care Center, the last central Iowa nursing home that took patients on ventilators. But Fleur Heights decided recently to phase out the service. And after De La Cruz was hospitalized last month, the nursing said she could not return there. […]

The Fleur Heights nursing home blames insufficient and untimely payments from Iowa’s Medicaid program, which covers most disabled Iowans who use long-term ventilators. Just six of Iowa’s 417 nursing homes remain listed as places that accept such patients. All of those facilities are at least an hour-and-a-half drive away from Des Moines. […]

Jennifer Conner, chief operating officer of Fleur Heights Care Center, said her company made “the very difficult choice” of dropping ventilator-care service on Sept. 1. She said the new managed-care companies have been slow to pay bills, compounding the problem of insufficient Medicaid payment rates. […]

Cyndy Miller, a lawyer for the advocacy group Disablity Rights Iowa, said state administrators are responsible for enforcing the Medicaid management companies’ contracts. The lack of any Des Moines-area nursing homes offering ventilator care suggests the companies aren’t fulfilling their responsibility to ensure an adequate network of care providers, she said.

De La Cruz died in October after refusing continued treatment for an infection.


The ombudsman noted optimistically in a sidebar on page 1,

I am pleased that the Legislature is taking steps to correct some of the problems we and others have identified with the MCOs. As of the publication of this report, legislation remains alive that if passed and signed by the Governor would address payment of provider claims, standardize provider enrollment forms and uniform credentialing standards, and provide services when members win appeals. The proposed law also would require DHS to review and approve a member’s reassessment if there is a decrease in level of care. In addition, the bill would require DHS to facilitate a work group to review home health programs and initiate a review process to determine the effectiveness of prior authorizations. Lastly, DHS would have to hire an independent auditor to perform an audit of LTSS [long-term support services] small-dollar claims.

Hirschman confirmed by e-mail today that she was referring to House File 2462, which cleared the Iowa House unanimously on March 8. That bill did not make it through the Senate Appropriations Committee in time for the legislature’s second “funnel,” but House Study Bill 680 “contains identical language,” according to the ombudsman. It’s pending in the House Appropriations Committee now and not subject to funnel deadlines.

Speaking on the Iowa Senate floor on March 15 (starting around 9:15:30), Senator Liz Mathis asked, “Why should a man who receives Medicaid have to go to court to get bowel care?” She warned that more lawsuits will follow, filed by Medicaid recipients denied “dignity” and “basic medical care.” Mathis reminded colleagues that Senate Democrats tried unsuccessfully to halt privatization in 2016. The same year, they approved a strong oversight bill that died in the Republican-controlled Iowa House. Senate Democrats submitted several Medicaid-related bills this year, but the previous Majority Leader Bill Dix refused to take up legislation offered by “the minority.”

Alluding to House File 2462, Mathis said “perhaps the last hope” for better oversight was “an adequate bill” pending in the Appropriations Committee. She asked newly-elected Senate Majority Leader Jack Whitver if he would promise to bring that legislation to the floor. “We are committed to doing everything we can to make sure managed care works, and we still have several weeks left in session to do so.”

“Will you bring it to the floor?” Mathis pressed. Whitver said he wasn’t sure which bill she was referring to, adding, “I can assure you, we are working on this. The governor mentioned in her state of the state that this is something that she wants to continue to improve, and we are committed to doing that.”

Nearly three weeks later, House File 2462 hasn’t even had a Senate subcommittee hearing. Lawmakers are likely to adjourn later this month and have not begun to consider appropriations bills for the coming fiscal year, leaving little bandwidth to work on Medicaid oversight. If Republicans were serious about the matter, they would have approved this bill before asking senators to confirm DHS Director Jerry Foxhoven in late March.

Though Foxhoven has promised his department will make managed care work better for patients and providers, odds are next year’s ombudsman’s report will cover much of the same ground Hirschman did this week.

  • Ah, memories

    “The governor mentioned in her state of the state that this is something that she wants to continue to improve, and we are committed to doing that.” Huh. That’s the very same thing that was said in regard to the very bad water quality bill signed in January.

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