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Survey Shows Iowa Providers Still Struggling with Medicaid Privatization

July 25, 2016 10:24 am by: Category: 2016 Session Information, Featured, Health Care, Recent News 2 Comments A+ / A-

Iowa Providers Still Struggling with Medicaid Privatization
Fewer Services, Rising Costs Cited in New Provider Survey

DES MOINES – A new survey released today finds Iowa Medicaid providers are still struggling under Governor Branstad’s privatization plan, which began earlier this year. Providers said the privatization plan has led to increased costs, reduced services for clients, and even forced them to borrow money because they are not getting paid on time.

“These survey results confirm what Iowans across the state have been saying to us for months: The Medicaid mess is a major burden for Iowa health care providers. That’s terrible news for thousands of Medicaid recipients because it will lead to reduced access to care and poorer health outcomes,” said Rep. Lisa Heddens of Ames, Ranking Member of the House Human Services Budget Committee.

According the survey, 90% of providers have seen their administrative costs increase and nearly two- thirds of them have received lower reimbursement rates. Nearly eight in ten providers said they are not getting paid on time and 28% of providers have been forced to take out loans to cover their expenses while waiting for payment.

“Ever since Governor Branstad turned over management of Iowa’s Medicaid system to three out-of-state corporations, Iowa physicians and other health care providers have faced more hurdles and headaches as they have attempted to provide quality healthcare. These survey results are more evidence that the Medicaid mess is getting worse, not better,” said Sen. Liz Mathis of Robins, Chair of the Senate Human Resources Committee.

Providers who completed the survey also said services for Iowans on Medicaid will suffer as a result of privatization. Forty-six percent of providers said they have, or will be reducing services, while 61% said quality of services is suffering as a result of privatization. Of those surveyed, 38% also said their clients are no longer able to continue seeing specialty providers out-of-network.

“We must continue to listen to Iowans, be vigilant about holding Governor Branstad, the Department of Human Services, Iowa Medicaid Enterprise and the out-of-state corporations accountable for their actions to ensure that vulnerable Iowans get the health care they deserve,” Mathis added.

The survey was completed by over 400 Medicaid providers from around Iowa, including doctors, hospitals, local clinics, and non-profit health care providers.

Click here for full results.


Highlights from Medicaid Provider Survey

423 Responses from Iowa Providers

Services Reduced

  • 46% of providers will or are planning to reduce services
  • 80% have seen an increase in the rates of denied claims since privatization began
  • 19% said their organization or clients have successfully appealed denials, while 45% have not
  • 61% said privatization has reduced the quality of services they can provide
  • 38% said Iowa Medicaid patients are not able to continue seeing their specialty providers out-of-network


Higher Costs

  • 90% said Medicaid privatization has increased their administrative costs
  • 28% of providers have been forced to take out loans to cover their expenses while waiting for payment
  • 66% said reimbursed rates have been lower than their contractual rates
  • 79% of providers said they are not getting paid on time


Comments from Medicaid Providers

“We cannot provide for our patients if we can’t get things implemented. No one can ever give us a straight answer. What a mess. If we can’t get things approved, we can’t help the patients.”

“Personally, it has harmed our most vulnerable locally, as they now have little to no options for some services (such as those on the ID Waiver program) and sometimes no local options at all (with this being a rural area and limited providers who are not on all three MCOs).”

“MCOs not reimbursing the Medicare coinsurance amount that was reimbursed previously. Also, we have patients that went to Mayo Clinic previously and would be better served to remain with them but they are being told they will have to transition to another provider that is in-network. Some of these patients are children with cancer and they will have to re-establish with a different facility with new faces and this can be terrifying to a child. The MCOs don’t care about that fact. They are more interested in saving money.”

“The switch has caused a significant hardship to rural mental health centers. Our agency has had to take out loans and some staff have volunteered to go without pay for a couple of pay periods. This is all because the MCOs owe approximately $200,000 to us at this time. We are forced to do new process, but are not told about it until we follow up on denials. The MCOs were not at all prepared for what they took on in such a short time. We need help!!!!”

“We are facing a dangerous situation with one particular MCO denying authorization for care needed to keep clients in their home. They are ignoring the Iowa Medicaid coverage benefit for home health clients. This situation is deplorable!”

“(Privatization has) harmed the level of care. We can have patients in 10/10 acute pain that are referred to PT but according to certain MCOs, we have to perform only an evaluation and cannot treat this person. We then submit a request for therapy treatment and at times are waiting 3-4 weeks to receive the green light to be able to perform treatment. This is not serving our patients in the best manner.”

“Some simply cannot get medication that they previously could. Some have had to shift to alternatives that do not work or do not work as well.   Most alarmingly, at the two residential centers, the only places I actually treat Medicaid only patients, the standard for staying in long-term treatment has drastically changed to the point where it is jeopardizing the entire system. Both facilities are spending dramatically more time reviewing cases with the MCO’s and less time in care and care coordination.”


Comments (2)

  • Sandra

    It seems that most Iowans who deal with Medicaid, from doctors, dentists, pharmacies, and the recipients of their services through the “old” state run system, foresaw this result. Why couldn’t Governor Branstad?

    This was an Executive Order, not a change effected by our state representatives after due research, public input, and a vote. Like the closing of the Mental Health Institutes, which was the Governor’s decision, and created the same doubts about the results.

    Now we have a mess for everyone involved, except the MCO’s who are profiting by rejecting legitimate claims for services and not paying many which are approved. We may soon be losing a lot of medical providers, because they will refuse to accept Medicaid patients, as some did even before this fiasco.

    Here’s an example of the simplest type of problem: A young boy in my family is taking a drug prescribed by his doctor at U of I Children’s Hospital. He takes 1 and 1/2 tablets a day, and the medication really helps him. Now the MCO says he must change to their ‘approved’ medication. It’s the same drug, but comes in a capsule, so no way to take 1 and 1/2. The best we can do is give 2 capsules every other day. The insurance company is making a medical decision, not the doctor.

    Not surprisingly, we’ve encountered the same problem with a prescription for a diabetic medication. Although the patient has been using the same medication for over a year, and it’s working well for her, the MCO has ordered that she try 2 other meds instead, and if they don’t work as well, she will be allowed to revert to the drug her doctor prescribed.
    Note: The first drug she tried caused her blood sugar readings to go UP. Good call MCO! NOT!

    Most insurance companies do this type of thing to cut costs, but Medicaid recipients have no recourse; they are, for all intents and purposes, shackled to the decisions made by the MCO’s because they can’t afford the “affordable” insurance under Obamacare>

    How long will it take and how many patients and providers will bear the cost of this mess before we say ENOUGH and kick the MCO’s to the curb?

  • dr donalee foste

    Representative Gaskill— I wanted to contact my state representative about another example about the Medicaid mess. Yes the MCO’s are severely cutting funding for the mentally ill and handicapped in this state..Residential facilities in this state for the mentally ill individuals–including some very high risk sex offenders–have received cut of 67 % of the cost of caring for these individual. If a patient is a tier 5 or 6 patient–I high risk–the MCO’s are only willing to pay at the rate of a Tier 1…So these facilities cannot afford to pay for adequate staffing to care for these patients..
    Many mentally ill patients are totally loosing funding. Central Iowa is going to see a rise in crime, drug addiction, homelessness and suicide. If the MCO’s want to save money try to get more control over ER visits. We have patients who use the ER instead of a family phsycian. MCO’s would save millions if ER access was more controlled–example we have phone nurses tha screen our patients–require pt’s to talk to them to see if they need emergency care..Raise the co-pay on ER visits–$10.
    Currently there is no co-pay for children but it would be possible to initiate co-pay requirements for children over age 5 unless the situation is an emergency.
    In short–our Medicaid services must continue unchanged to the mentally ill and physically impaired persons in Iowa. To not do so is very immoral.
    Donalee Foster MD FAAP

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