December 15, 2015

Medicaid Privatization in Iowa Shaping up to be a Disaster – Wash Post

Washington Post opinion writer Dana Milbank focused his Friday, December 11 column on the problems the state of Iowa implements Medicaid privatization. It is a cautionary tale for those who seek to privatize health care for vulnerable citizens.

Governor Terry Branstad (R) is forcing about 560,000 of the state’s poorest residents out of the traditional Medicaid health care program for the economically disadvantaged. Medicare privatization will require people with disabilities to sign up with private insurers. The changes go into effect on January 1, 2016.

Noting that “the transition of Iowa’s $4.2 billion Medicaid program has made the rollout of look orderly,” Milbank highlights some of the concerns:

  • Financial and political improprieties. WellCare, one of the four companies hired to manage the new program, failed to disclose details of its “integrity agreement” with the federal government after the 2014 convictions of three former executives involving the misuse of Medicaid money. In addition, WellCare had paid $138 million to resolve claims that it over-billed Medicare and Medicaid, and the firm hired two former Iowa legislators who improperly communicated with the Branstad administration during the bidding process.
  • Ineptitude and confusion affecting beneficiaries. The Des Moines Register has reported that the four companies selected to operate Iowa’s Medicaid program have had more than 1,500 regulatory sanctions combined and have paid $10.2 million in fines over the past five years. Infractions included canceled appointments, privacy breaches, untimely processing and failure to obtain informed consent. The rollout has also been hampered by delays, and some beneficiaries of the program are only now getting their enrollment packets, though the deadline for signing up is Dec. 17.
  • Health care providers’ complaints. Providers say that they are being forced to sign incomplete contracts or face a penalty, and they complain that some contracts don’t cover services that had been covered under the existing Medicaid program.
  • Doubt that the new program will actually save the state any money. Despite claims that the state will save $51 million in its first six months, documentation is lacking.

Gov. Branstad had the authority to implement Medicaid privatization without input from the state legislature. However, officials with the Centers for Medicare and Medicaid Services (CMS) were in Iowa last week and are scheduled to make a ruling this week on whether the plan can proceed.

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