Visit our website ⇒

Medicaid Wishful Thinking


At a recent meeting of the Iowa Senate Human Resources Committee, Medicaid beneficiaries and providers were asked to testify regarding the transition to Medicaid managed care. Their universal response? Not so great. Virtually everyone who testified complained of slow and inaccurate payments, significant increases in denial rates and consumer difficulty navigating incredibly complex regulatory waters.

More specifically for hospitals, members of the IHA finance group evaluating managed care concerns indicated in its separate meeting that many providers are not yet loaded into the managed care organizations’ (MCOs) systems, despite contracts being signed last spring; in many cases, remittances are being sent to the wrong hospitals; claims for Medicare/Medicaid deductibles and ambulance services are routinely being denied and there’s widespread inability to connect with MCO provider representatives to resolve questions.

In response to the Senate committee meeting, Governor Branstad was quoted in the Quad-City Times as saying that complaints are coming from providers who are upset “because we’re checking on them now.” He then added, “The Democrats don’t like it and the Des Moines Register hates it. These great so-called progressives are the ones that are the most against progress. They want to keep doing it the expensive, old-fashioned way that doesn’t work as effectively and efficiently as what we’re doing today and we’re not going to be deterred.”

So it’s all in the spin. Evidence from other states suggests that Medicaid privatization is not less expensive than traditional state-run Medicaid programs. Over time, these private insurance companies will most certainly come back to the Iowa General Assembly to ask for more money to manage our Medicaid program. And “efficient” was not a word uttered by one person at the Senate committee meeting. Even the CEOs of the managed care companies who testified at the meeting indicated the “transition period” to get things working smoothly could take as long as 12-18 months.

What is clear is that as data emerges in the coming weeks and months, we’ll all have more and more comparative information upon which to base our opinions. For example, the Iowa Department of Human Services (DHS) released its initial dashboard the evening before the Senate hearing. And while administration representatives touted the fact that the MCOs have processed and paid 3.47 million claims since the April 1 enactment of Medicaid privatization, they didn’t spend a lot of time highlighting the 1.5 million claims that have been denied, suspended or rejected in that same time period (and those are DHS figures). That’s a 30 percent rejection rate, unheard of under traditional Medicaid.

Senator Liz Mathis (D-Cedar Rapids), who chairs the Senate committee, said “I think the transition has been rugged, it’s been sloppy and there’s a disconnect between what we’re hearing from state officials and what the providers are telling us.” That’s putting it mildly.

One would think that even the supporters of Medicaid privatization would acknowledge that the MCOs have to get to a point of paying claims responsibly and correctly before their vision of a transformative Medicaid program is actually operating. Until then, that vision only exists for those who are closing their eyes and wishing it were so.

Health Policy Sequels Fail to Impress

Leave a Comment

The movie “Independence Day” came out 20 years ago and was a huge box office success. In one of the longest sequel gaps in movie history, “Independence Day: Resurgence” is now on the big screen. While the show promises to be great summer entertainment, one critic has asked why the entertainment industry seems to continually revisit the same old stories…is there nothing new under the Hollywood sun?

With a little reflection, the same can be said about the state of our health care system. Last week, the U.S. House of Representatives released its long-awaited alternative plan to Obamacare. It includes such things as more health savings accounts, medical malpractice reforms, purchasing insurance across state lines and greater use of wellness programs. Gee…haven’t we “been there, done that”? And without any experience or evidence to prove these concepts lower the health care cost curve or actually provide meaningful health care access to real people? We didn’t like those “shows” before; these sequels would likely be no more fulfilling.

We’re not immune from health care “repeats” in Iowa, either. Currently there are some corners of the state calling for a review of Iowa’s certificate of need (CON) laws. Even the governor has recently been somewhat critical of the program, despite the fact that he approved significant changes to CON in the late 1990s that modeled the program into what it is today and it’s his office that names people to the Health Facilities Council (the board that approves CON applications). These recent criticisms are at least the third time in the past two decades that CON has come under fire, despite real evidence that states with CON statutes have lower health care costs and less intensive health care infrastructure. Same old, same old.

And of course, Iowa’s recent entry into Medicaid managed care continues this pattern of repetition. In Kansas, Connecticut, Florida, California and other states, hospitals and other providers have learned that managed care promises much but ultimately fails to deliver new or transformative ideas. Now, as expected, Iowa is screening the sequel to this theater of the absurd.

IHA continues to hear that claims aren’t being paid (or are being paid at ridiculously incorrect amounts), prior authorization denials are soaring and patients are challenged to get the services they need. Nothing new, just finding ways of not paying for care. A re-visitation of the failed HMO “gatekeeper” philosophy from 20 years ago.

Where are the new ideas in health care? In Iowa, those can be found at the provider level. Whether we’re talking the development of Accountable Care Organizations and population health initiatives or the hospital-led community health improvements through the State Innovation Model projects, Iowa hospitals are leading the way toward innovative care strategies and future payment reform. But just as Hollywood producers are gunning for the box office “sure thing,” so are our policymakers turning a deaf ear to the future while embracing failed health policy reforms of the past.

At least if you don’t like “Independence Day 2,” you can just leave the theater.

Medicaid ‘Smooth’ is in the Eye of the Beholder

Leave a Comment

“Smooth” sailing?

Iowa is now two weeks into Medicaid managed care, with sharply differing views on the success of the plan’s roll-out. While significant issues are already emerging for both providers and beneficiaries across the state, Governor Branstad last week said the transition was “smooth,” despite more than 3,000 calls pouring in the Iowa Medicaid hotline on the first day of implementation.

“Smooth” is indeed in the eye of the beholder; if you’re one of the thousands of disabled Iowans who were left high and dry for transportation to your job, or someone whose prescriptions suddenly were unable to be filled, or those just learning that their physicians no longer accept Medicaid patients, you likely have a different adjective to describe the experience.

In the hospital community, IHA is already hearing concerns about upticks in emergency room use, requirements to change laboratory contracting arrangements, prior authorizations for swing-bed admissions taking as long as two weeks and patients showing up without membership cards or any idea about changes in Medicaid. And this is just the tip of the iceberg. Wait until hospitals run into billing questions, payment denials and the sheer administrative complexity of dealing with three separate Medicaid payers.

At a press conference last week week, the governor and managed care organization (MCO) representatives touted more beneficiary services and benefits than ever before. This includes access to nearly 17,000 physicians (compared to less than half that many physicians being licensed in Iowa and lots of news about physicians abandoning the program) and access to more than 2,000 occupational/physical therapists (compared to 900 such professionals participating in Medicaid just two weeks ago). The number of participating hospitals is conspicuously left off the list, perhaps because IHA called the question on an earlier report of 570 hospitals (again, there are only 118 hospitals in Iowa).

Additionally, the governor states Iowa’s existing Medicaid program had zero value-added benefits, while the MCOs promise more than 80 such services, including gym memberships, GED support, mobile health units, financial management programming, medication adherence programs, caregiver training, Boys and Girls Club memberships and post-natal coaching. It seems like everything except the keys to a brand new car!

As IHA has been pointing out for more than a year, the statistics and claims from those defending Medicaid managed care are beyond incredulous. Nowhere in the country have MCOs deployed these strategies in a widespread manner to improve care or to lower costs. Adding in the new costs of their “value added” programs can’t effectively cut 15 percent from Iowa’s $4.2 billion Medicaid program, especially in states (like Iowa) whose Medicaid programs have been efficiently managed. Much more common are strategies that deny patient access and cut provider reimbursement while siphoning taxpayer dollars to out-of-state insurance companies.

That’s the lesson to be learned from the experience of other states. It’s what Iowa can now expect. Check back in a month, six months or in a year to see if the transition is still “smooth.”

large numberIt doesn’t take a math whiz to see that the Medicaid managed care numbers being spun from the Iowa Department of Human Services (DHS) and the governor’s office just don’t add up.

At a recent legislative committee, DHS officials claimed that 75 percent of Iowa health care providers had signed contracts with at least one of the three managed care organizations (MCOs). But the backup data they also provided to legislators indicated that Amerigroup had 76 percent of all providers contracted, AmeriHealth had 94 percent of providers signed up and United had managed to snag 116 percent of all in-state providers to agree to their terms. That would be a pretty tall order under any scenario, let alone in an environment where most providers still have serious questions about payment rates and utilization review!

That same document also claimed that only 45 percent of all providers have signed contracts with all three plans, yet also claimed that 86,000 out of an 89,000 universe of all potential contracts had been signed (that’s just over 95 percent).

Only in the world of double-spin and desperately trying to convince people that managed care is a good idea can 45 percent equal 95 percent.

And now this week comes a news release from the governor’s office touting that “managed care means more doctors for patients” and claiming that the MCOs have contracted with 8,600, 12,200 and 14,600 doctors respectively. The only problem with this boast is that according to the Iowa Board of Medicine, the state had 11,971 active licensed physicians at the end of 2015 and only 6,828 active physicians with work addresses in Iowa.

This isn’t the number of contracts signed, but the actual number of physicians the governor claims are on board with managed care. Maybe they’re counting lots of out-of-state physicians or perhaps all the people who stayed at a Holiday Inn Express last night. Regardless, it’s just another example of funny math being used to try to cover up weaker-than-expected provider networks emerging across the state.

It’s important that hospital advocates continue to look beyond the “spin” from those trying to sell the lemon of managed care to the Iowa population at large. Managed care won’t offer more provider choices or bring anything transformative to the table. It will restrict access to care for 560,000 Iowans and lower provider reimbursements.

The math that counts? Managed care would subtract more than $500 million from Iowa’s Medicaid program so that out-of-state insurance companies can churn our tax dollars for their own profit. And we should all grade that equation a solid “F.”

A Question of Access to Care

Leave a Comment

The recent U.S. Supreme Court decision in King v. Burwell definitively silences constitutional critics of the Affordable Care Act (ACA) and reaffirms that millions of Americans will continue to receive access to health insurance for the foreseeable future.

With that debate now settled, national attention returns again to the state-by-state decision of whether to expand Medicaid benefits under the ACA. Iowa remains one of the 29 states (plus the District of Columbia) that has expanded Medicaid to all adults meeting the federal poverty standards and, as has been previously reported, the positive impact of that effort is clear.

Not only has the Iowa Health and Wellness Plan provided 130,000 Iowans with access to health insurance, but hospital charity care has declined by almost one-third, which helps decrease costs throughout the entire health care system. In addition, quality metrics are improving across the board and the average patient length of stay is declining. Iowa Medicaid expansion is a textbook success story.

But that all could be undermined by the looming specter of Medicaid managed care coming to Iowa in 2016.

Despite promises of bringing efficiency and improved access to the Medicaid population, Iowans have seen no real details yet regarding how this plan is to be implemented – and the implementation is scheduled to take place within the next six months. The managed care organizations (MCOs) that will be entrusted with more than $4 billion of state Medicaid resources haven’t even been announced. And the examples of other states that have hurled “full-steam-ahead” into similar experiments hasn’t produced the overall savings or quality results that Iowa hospitals are clearly generating today.

Of particular concern to Iowa hospitals is the expectation outlined in the Medicaid managed care request for proposals of significant hospital utilization reductions. As one of the bidding MCOs posed to the state: “We have not seen annual managed care discounts in other states as deep as Milliman is expecting in Iowa…what other managed care programs lead Milliman to believe that it is attainable to save over 30 percent (in hospital utilization) and 40 percent in emergency room (use)?”

To put that in context, a 30 percent Medicaid utilization reduction would mean more than $240 million in Medicaid revenue declines for Iowa hospitals – including both Prospective Payment System and Critical Access Hospitals. What would losses of that amount mean to your hospital and community? What would such declines mean to your ability to continue providing innovative care management strategies to the patients you serve?

Additionally, because hospitals are the only health care providers mandated by law to treat all those seeking care, one could logically expect access to primary care to erode and those charity care reductions to reverse.

How the overall hospital community responds to these questions is an IHA priority, with membership workgroups already meeting this summer to identify policy questions and solutions. But individual community hospitals will also need to be evaluating how managed care will change how they deliver services and how turning Iowa’s Medicaid program over to out-of-state insurance interests in any way serves patients.

Ultimately, this isn’t a question about how to better manage Iowa’s state government; it is a question of whether or not the government truly supports reforming the health care system and providing improved access to care for all citizens.

Or is the state’s government merely interested in cutting support for Iowa health care providers?