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Six Republicans joined 26 Democrats in approving a bill (SF 2213) that will make sure Iowa avoids many of the mistakes other states have made in rolling out their Medicaid managed care systems. The "Medicaid Managed Care Program Integrity and Oversight" bill will make sure the three private companies chosen to manage Iowa's $5 billion Medicaid system will be closely watched by state agencies and stakeholder-led committees.  Click here to see how your Senator voted.

As Senator Amanda Ragan of Mason City said at the beginning of debate on the bill, "The intent of this legislation is to safeguard the interests of Medicaid members, encourage the participation of Medicaid providers and protect Iowa taxpayers.”   The bill is in response to concerns lawmakers heard from constituents concerned about privatizing the state's Medicaid program that provides health and long-term care services to 560,000 Iowans. 

The bill does four things:

  1. Makes sure there is good government oversight of the Medicaid managed care system, and strong stakeholder involvement.  This includes requirements to collect and analyze data to make sure the state is getting the results it expects, creation of an interagency work group to make sure state agencies are working together, and expanding the role of various state councils to make sure stakeholder input is received and addressed.  The role of the legislative Health Policy Oversight Committee is expanded to include broader oversight powers, the membership of the Medical Assistance Advisory Council (MAAC) is expanded (as is their role, with the addition of five subcommittees to address various areas of oversight), and the Patient-Centered Health Advisory Council is pulled into the discussion to develop strategies to improve the health of Medicaid members.  In addition, the state's Long Term Care Ombudsman is given authority to act on behalf of all Medicaid members receiving or needing long-term services and supports, and is directed to help any Medicaid recipient navigate state agency bureaucracies. The bill provides protections so that other agencies or elected officials cannot influence or interfere with the duties of the Ombudsman.

  2. Makes sure there are resources to invest in improvements to the system by creating a Medicaid Reinvestment Fund.  Each of the three MCOs will be required to contribute $5 million ($15 million total) to the fund beginning July 1, 2016.  After that, money from overpayments to MCOs, savings achieved by moving people from institutions into community settings, incentive funds that MCOs couldn't collect, and other savings are deposited into this fund.  Legislators will have the final decision on how to use this money, but it can be used to help increase provider rates, provide HCBS as needed to rebalance the system, reduce the HCBS waiver waiting list, fund systems that will protect the interest of Medicaid members and maintain an adequate provider network, pay for the services of the long-term care ombudsman, address workforce needs, and support innovation in public health agencies, aging and disability resource centers, MH/DS regions, social services, and child welfare providers.

  3. Maintains the autonomy of the children's health insurance (hawk-i) board, which is supposed to approve all changes to contracts that provide services in this program.  They were not consulted nor did they approve the change to managed care, so legislators felt it important to emphasize what is already in current law.  In addition, the bill adds occupational therapy as a covered service under the hawk-i program, and requires the hawk-i board approve any changes to the criteria used to authorize services to children.

  4. Amends the Managed Care Organization (MCO) contracts to protect consumers, preserve provider networks, make sure the unique needs of children are addressed, and assure MCO accountability.  By far this is the most controversial piece of the bill, forcing all MCOs to sign contract amendments that would require them to do the following (and withholds an additional 2% of their payments that will only be paid to them if they meet all requirements):
  • Continue a Medicaid member's benefits during an appeal.
  • Continue same services, at same levels, with same conditions as before managed care.
  • Monitor and report service reductions, suspensions, and terminations.
  • Report on HCBS waiver waiting list changes.
  • Treat people with chronic conditions or long-term supports and services the same as other populations when it comes to service authorizations (not discriminate against them).
  • Allow a Medicaid member to keep their existing case manager beyond the six-month transition.
  • Guarantee all care coordination and case management are delivered by appropriately trained professionals in a conflict-free manner.
  • Maintain existing provider-member relationships for at least one year.
  • Provide access to dental coverage.
  • Account for decisions made (no automatic or arbitrary denials of service).
  • Maintain lists of complaints and appeals, which will be made public (not details - just raw numbers).
  • Survey members for satisfaction.
  • Address needs of children and maintain child health panels to make sure policies reflect this.
  • Cover early intervention and prevention strategies for children.
  • Provide special incentives for innovative and evidence-based preventive strategies for kids.
  • Include coverage for children that reflects what is in state law, and is no more restrictive.
  • Monitor the quality of children's services, including the provision of EPSDT benefits.
  • Make sure savings does not come at the expense of further reductions to provider rates.
  • Reimburse providers at reasonable rates that are consistent with what is in Iowa law (no lower).
  • Keep rates the same for the entire contract period.
  • Use the same process as all MCOs (drug lists, prior authorization, utilization management).
  • Give providers up to 365 days to submit claims.
  • Pay hospitals at rates required in law, and pay critical access hospitals for 100% of their costs.
  • Continue to pay cost-based reimbursement to community mental health centers requesting it.
  • Work hard to include safety net providers (free clinics, rural health clinics, community health centers).
  • Make sure costs are not shifted to other non-Medicaid providers (like MH/DS regions).
  • Give all existing Medicaid providers the chance to be a part of their network (at rates in law).
  • Require MCOs to allow exceptions so that people can keep out-of-network (or out-of-state) providers.

During a press interview, Governor Branstad seemed to indicate the bill was not needed.  “The whole idea of managed care companies is indeed to provide oversight over the providers to see that we’re moving in that direction...How much of that duplication do we want and how much will it cost? Those are the kinds of things you have to balance in determining whether this is good public policy.”

The bill is not expected to be discussed in the House. Instead, Representatives hope to discuss parts of the bill during the budget negotiation process, and look for areas of common ground that will help make sure MCOs are accountable, they are achieving expected results, and that any problems are quickly addressed.

Do you see things in this bill that you like?  Are there things that you think are not necessary?  Are there things missing that the state should consider doing?  If you have ideas, contact your legislators now. 

  • Call your Representatives during the week at (515) 281-3221.
  • Call your Senators during the week at (515) 281-3371.
  • Your 2016 Guide to the Iowa Legislature will list home phone numbers and email addresses.
  • You can also email your legislators using our Grassroots Action Center here.