Questions mount ahead of imminent Medicaid changes

UIHC has signed contracts with Iowa's three new MCOs. -- photo by Adrianne Behning Photography
UIHC has signed contracts with Iowa’s three new MCOs. — photo by Adrianne Behning Photography

This is the second in a two-part series on the privatization of Medicaid in Iowa, which is set to begin this week. The first part can be found here.

Fear of the unknown

This coming Friday, Iowa will be privatizing its Medicaid healthcare system. To one side, it’s seen as an inevitable fix for the rising costs of the state’s low-income health program, to the other it’s a transition that means cuts in services for the most needy patients that is happening way too fast.

The biggest concern for many of Iowa’s Medicaid recipients is the lack of answers they’re receiving about what the change means.

Gina LaHue has been a Medicaid patient since 2008. She suffers from a number of physical and mental health issues, and regularly seeks care at the University of Iowa Hospital and Clinics. For her, the worst part of the switch to managed care is how she and the thousands of other Medicaid recipients have no idea what’s going to happen to their coverage. She said she was “blindsided” when she heard the announcement of the plan in August.

“There were really no answers. By no answers, I mean what hospitals will take my insurance, how will this switch affect me, what about my providers,” she said. “Add in all of my doctors, therapists, psychiatrists and home health care assistants, and the waters became more murky.”

There seem to be more questions than answers. Will costs go up? How is the change going to save money? Will people lose services?

“It’s unconscionable,” said State Rep. Sally Stutsman (D-Riverside). “I think it is just unfortunate the anxiety the state of Iowa has put these people and families through. This governor was just determined that this was going to go as fast as possible.”

While there seem to be few easy answers as to how the transition will go, there do seem to be some very clear questions. For starters, how Medicaid will be administered by three separate entities, the managed care organizations (MCOs), rather than one. That’s a question especially important to foster parents, said Della Mull, who has five adopted children and raises two of her grandchildren, who receive services through Medicaid.

“Now everyone could be with different agencies, and you can only have one agency. You might have to choose what’s most important for that particular person. You may have to get a new doctor or a new dentist,” said Mull. “Especially with more than one person, it’s a lot to juggle.”

The very best case scenario that can be hoped for, according to Stutsman, is that people don’t have to change physicians, and that things continue as they were. The worst case is that services could suffer severe cuts, or that people don’t get services at all.

There are some very clear benefits though, according to State Rep. Bobby Kaufmann (R-Wilton). If the plan works as intended, care will be maintained for all Medicaid patients, and it could possibly save the state up to $100 million. “Long term, this fixes what was an indisputable crisis,” he said. “I don’t think there’s a chance of some epic collapse.”

Kaufmann admits that with such a huge change there may be some glitches in the beginning, “But I don’t see some draconian worst case.”

Providers are facing the same unknown with the MCOs, according to Mull. Her main concern is that the companies won’t reimburse claims in an efficient manner. She’s worried about reports of claims not being reimbursed for over a year in Kansas.


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“It will definitely affect Families Inc.,” she says, of the non-profit home care service she serves on the board of and whose client base is primarily made up of Medicaid recipients. “What happens is these agencies don’t have enough overhead to pay their staff. If they’re not getting reimbursed, if it could be up to a whole year before they get paid, the agency has to borrow money.”

UIHC, the state’s only comprehensive academic medical center, has already signed contracts with all three MCOs to ensure continuing coverage for its Medicaid patients. Those patients numbered 44,203 in 2015 alone, and the hospital provides roughly 800,000 appointments to Medicaid recipients a year, according to UIHC spokesperson Tom Moore. How exactly they will be affected by the move to managed care isn’t known though, he said.

“Unfortunately it’s very hard to predict. Anytime there’s a major program change like this there are always issues and challenges,” said Moore. “Just from anecdotal reports I’ve heard [Gov.] Branstad say it’s worked very well in some states, and I’ve heard reports that it hasn’t worked very well.”

This unknown is a huge worry for providers like Mull’s organization, that so many non-profits, hospitals and businesses are now reliant upon the three MCOs for reimbursement, and if they do have trouble, many entities may close down or move out of state.

And there’s almost no oversight of the whole process.

Lack of oversight

In order to correctly oversee the program and ensure it functions properly, Iowa will need around 100 ombudspersons for the program to handle complaints, according to Stutsman. There are currently “maybe two,” she said.

Oversight is one of the only real measures that can be taken to ensure Medicaid continues to function properly through the transition, as the chances of reversing the move to managed care are highly unlikely, according to Mull.

To that end, the Iowa Senate passed a bill on Mar. 1 that would create an oversight committee for Iowa’s Medicaid programs. Mull described it as recipients’ “last line of defense.”

“This advisory board is very critical,” she said. “And it’s critical we have knowledgeable people on the advisory board. We need somebody on that board that understands children, that understands foster children, and that understands the waiver programs and how they work.”

However, Stutsman was unsure if the bill will even be taken up in the Iowa House of Representatives.

Kaufman, on the other hand, said he was “cautiously optimistic that there will be some kind of oversight passed in the House.” He said, “I know that any reasonable oversight that went before my desk, I would vote for it.”

LaHue was optimistic about people’s chances with the new system, though, insisting that with enough people and enough pressure on legislators, the necessary oversight is possible.

“The problem is that too many people think it’s not their problem”

“Every single one of us, even those who care for the ones who cannot speak up need, no, must get in touch with our state representatives and state senators and tell them, implore them, and have them listen to us that this oversight needs to happen,” she said.

The problem is that too many people think it’s not their problem, according to Mull, when in fact the move to managed care is going to impact everybody.

“People that do not have Title 19 are not concerned about this happening. ‘It’s those poor people over there. That’s who that affects. Why should I worry about this?’” said Mull. “What we need people to understand is that when these businesses and doctors cannot be reimbursed, that means the people with private insurance are going to pay more.”

Whether Iowans are going to experience major cuts in services, or only a few minor glitches, like so much else surrounding the change remains an unknown. But as Kaufmann pointed out, none of the 31 states that have made the shift to managed care have pulled out so far. What’s certain is that the shift happening this Friday likely marks a permanent change to the way all Iowans — not just those with Medicaid — will receive health care in the foreseeable future.

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