Iowa seeks $225 mil­lion for Med­i­caid man­aged-care losses

Modern Healthcare - - REGIONAL NEWS - —Maria Castel­lucci

Iowa’s pri­va­tized Med­i­caid pro­gram has asked the fed­eral gov­ern­ment to pay up to $225 mil­lion in riskcor­ri­dor pay­ments to make up for losses ex­pe­ri­enced by the health in­sur­ers that run the year-old man­aged­care pro­gram.

The three in­sur­ers that op­er­ate the state Med­i­caid pro­gram—An­them’s Ameri­group, Amer­iHealth Car­i­tas and Unit­edHealth­care—have lost an es­ti­mated $450 mil­lion since the pro­gram be­gan in 2016.

Amy McCoy, a spokes­woman for the Iowa Depart­ment of Hu­man Ser­vices, says she an­tic­i­pates the CMS will ap­prove the pay­ments in the “com­ing weeks.” Risk cor­ri­dors are com­monly used for Med­i­caid man­aged-care pro­grams, she said.

State tax­pay­ers will also pay about $10 mil­lion af­ter June 2018 to help the pro­gram. But by out­sourc­ing its $4.2 bil­lion Med­i­caid pro­gram to man­aged­care com­pa­nies, Iowa saved about $110 mil­lion, McCoy said.

Still, the pro­gram has been con­tro­ver­sial. The in­sur­ers have com­plained it is “dras­ti­cally un­der­funded,” call­ing it a “cat­a­strophic ex­pe­ri­ence.” Gov. Terry Branstad, a Repub­li­can, de­fends the pro­gram and has said he will work with man­aged-care com­pa­nies to de­ter­mine “what makes the most sense go­ing for­ward.”

The Iowa Med­i­caid pro­gram serves about 500,000 res­i­dents.

More than two-thirds of states, in­clud­ing Iowa, out­source some or all of their Med­i­caid pro­gram to pri­vate com­pa­nies, but the ben­e­fits of the prac­tice and its im­pact on qual­ity and cost of care have been un­clear.


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