Democrats Question Performance of Iowa’s Privatized Medicaid System

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A handful of Democrats in a health oversight committee say they continue to have questions about the performance of Iowa’s Medicaid program, more than eight months after it switched to a privatized system run by three insurance companies.

Democrats in the bipartisan Health Policy Oversight Committee expressed skepticism about the new healthcare system for poor and disabled residents amid a roughly four-hour meeting at the Capitol that featured results of a quarterly report about the program. The report was released last month by the Iowa Department of Human Services, which oversees the three insurance companies that now run Medicaid.

Despite an assessment by DHS officials that the agency was seeing improvements in the system, Democrats continued to share anecdotal reports about problems regarding patient care and reimbursements for service providers that offer Medicaid. Democratic Sen. Liz Mathis said she was particularly concerned that some providers are reportedly owed hundreds of thousands of dollars.

“We want to iron out these difficulties and we want to have the best system we can for the people who are the most vulnerable,” she said.

Amy McCoy, a spokeswoman for DHS, noted that some issues regarding coverage or reimbursements also existed under the old state-run system. But she emphasized that the agency continues to address lingering problems, especially as it relates to providers seeking reimbursements.

DHS officials said during their presentation that data collected in their quarterly reports should soon clearly reflect performance trends, a point that Republican Rep. David Heaton reiterated during closing remarks.

“The longer we go, the more meaningful the data,” he said.

The oversight committee, which first met in late 2015, was formed as Iowa moved its Medicaid program to privatization. Democratic lawmakers have heavily criticized the switch and continue to say it was rushed. Some expressed reservations about an estimate from DHS that the state is projected to save $118 million during the current budget year for privatizing Medicaid. Democratic Sen. Joe Bolkcom called the figure “smoke and mirrors” because the department did not pinpoint specific areas in the system where savings were achieved.

Jean Slaybaugh, the chief financial officer for DHS, said the department reached its estimate by comparing how much money Iowa would have spent on Medicaid under the old state-run system.

McCoy later pointed out that the new system is helping the state contain costs while offering better care. She noted that a recent budget group released data that shows Iowa will need to plug in about $100 million for its current budget year when the Legislature convenes in January.

McCoy said without privatization, “that gap would be even bigger.”