State auditor: Health care providers say privatized Medicaid is failing Iowa

Iowa Auditor of State Rob Sand speaks during a news conference. (Photo courtesy of Iowa Auditor of State's office.)

A majority of Iowa’s health care providers believe privatized Medicaid has failed to live up to the promise of improved, more accessible medical care.

Those and other findings were reported Monday by Auditor of State Rob Sand, a Democrat, who has long questioned the GOP-led initiative to privatize the management of the state’s Medicaid system.

“These numbers speak for themselves,” Sand said at a press conference. “When we asked whether or not the privatization of Medicaid had been beneficial to the quality of care that Iowans are receiving, 6.1% of respondents felt that it had, and 51.5% of respondents felt it had been negative.”

Mike Randol, the director of the Medicaid program at the Iowa Department of Human Services, said the department values “the feedback from all Iowa Medicaid providers” and is implementing improvements to the Medicaid program based on that feedback.

“Our program also includes stronger accountability measures and we withheld funds from an MCO that did not pay providers on time,” he said. “Oversight of our managed care organizations is essential to ensuring providers are supported by timely and accurate payments so they can continue to provide critical care for Iowans.”

Prior to 2016, the state of Iowa managed the $5 billion Medicaid system that pays for the medical care received by low-income and disabled Iowans.

At the time, Gov. Terry Branstad, a Republican, said the move would save money for the state and provide better quality care for Iowa’s Medicaid recipients, a position maintained by his successor, Gov. Kim Reynolds.

From the beginning, the privatization effort has been criticized by patient advocates and by some care providers who claim it has increased bureaucratic hurdles and made it more difficult for patients to access care and for care providers to collect payment.

The question of savings has been clouded by uncertainty over whether the state’s increased spending on Medicaid would be even greater without the managed care companies in charge of the program.

Sand’s office surveyed 2,600 of Iowa’s nearly 12,000 health care providers to determine how they viewed privatization. Hospitals were oversampled, and the auditor attempted to survey other providers — optometrists, therapists, chiropractors, etc. — in proportion to each profession’s presence in Iowa, but otherwise the survey recipients were selected at random.

Of those who responded, 54% said privatized Medicaid has “harmed or impeded” access to care in Iowa, while roughly 10% said it has “improved or facilitated” access.

Among the other findings in Sand’s report:

  • Most of Iowa’s care providers believe policies and guidelines under privatized Medicaid have become more strict under the hired MCOs, and that group believes, by a 5-to-1 margin, that the restrictions were inappropriate.
  • Iowa hospitals are among privatization’s biggest critics. The vast majority of them said policies and guidelines were more strict under the MCOs, and those hospitals, by a 12-to-1 margin, said the restrictions were inappropriate.
  • Roughly 83% of the hospitals reported they were either extremely dissatisfied or dissatisfied with MCOs’ efforts to pay for services on a timely and accurate basis.
  • More than 91% of the hospitals reported that settling claims for payment is a more complex process through MCOs than it was when the state managed Medicaid.
  • When presented with three positive impacts privatization might have had on their businesses, more than two-thirds of the respondents instead chose “other” and then stated there were no positive impacts, or that there had only been a negative impact.

Sand has recommended that the state consider the viability of establishing a single set of policies, procedures, and requirements to be implement by all current and future MCOs with which contracts are established.

Clark Kauffman
Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.