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Senators Talk About Managed Care in Morning Comments

Monday, April 5, 2021

At the beginning and end of each day during the legislative session, your state legislators are allowed to talk about anything on their minds during "points of personal privilege." This is basically just an open time when a legislator may make an announcement (birthday, anniversary, bragging about a team in their district winning state championships, or talking about an issue that has them concerned or excited).  Usually these are pretty boring, but they sometimes get animated and focus on a policy area that may be overlooked during the session.  That's what happened on Wednesday, March 31, on the eve of the fifth anniversary of the state's move to Medicaid managed care.

Sen. Janet Peteresen (D-Des Moines) honored the five-year anniversary of the transition saying it has been "a complete mess that's cost taxpayers millions of dollars, stripped health care away from Iowans, and ripped off Iowa health care providers."  Here are the rest of her comments:

Out-of-state private managed care companies have a lot to celebrate, and boy could they throw one whopper of a party with the amount of money they've taken out of Iowa with cushy contracts while giving Iowa's health care infrastructure a big power flush down the drain. So where do these profits come from?  YOU. That's right YOU, the taxpayers of Iowa. 

These out-of-state for-profit companies have gotten big, fat raises courtesy of Gov. Kim Reynolds. In fiscal year 2019, they received an 8.4% increase. In fiscal year 2020, they got an 8.6% increase. Even in fiscal year 2021, they are expecting another raise. What’s disgusting is how big their raises have been while public servants protecting Iowans in our prisons, teaching our kids, and caring for older Iowans haven’t seen a raise anywhere close to that amount for more than a decade.

And, unlike a publicly run system with sunshine and accountability, (Governor) Reynolds’ team of MCOs raked in the profits. After asking for years, we recently received data on the amount of profit being earned by private managed care organizations. Amerigroup earned $81.8 million in profits in calendar year 2019 and $146 million to date in calendar year 2020 (as of September 30, 2020). Iowa Total Care's profits in calendar year 2019 was $15.2 million and, to date through September 2020, $14.1 million. 

Looking back to the beginning of the privatized program and including the beginning when all MCOs experienced losses because of the rushed, botched implementation, the overall profit for Amerigroup was $60.7 million and Iowa Total Cares' total profit was $29.4 million. What else did Governor Reynolds promise Iowans?

Reynolds and Republican lawmakers said the Medicaid budget would be stable and more predictable. Guess what? Not true. Costs have gone up almost 9% for two straight years, in FY 2019 and 2020. That’s three times higher at least than any growth we saw when our system  was publicly managed, when Iowans were running the system. Iowans were promised savings, better access to service, and healthier Iowans. But instead, we got:

Cuts and delays in payments to health care providers that offer critical services to hundreds of thousands of Iowans. Some cuts and delays were so bad that providers shuttered.

Hoops and hurdles for Medicaid recipients to get the health care they need.

Less money for our schools, public safety and other priorities Iowans care about. Why? Because Governor Reynolds has to feed the privatized Medicaid beast sending more of our money out of state to for-profit MCOs.

Yes, it's been five long years since Governor Reynolds started digging this hole, and she has a firm grip on her privatized Medicaid shovel with Republican lawmakers helping her continue to dig this hole. While she claims it has been modernized, Iowans know better. Our Medicaid system has been more like “slaughterized.”  And instead of facing the problem, statehouse Republicans stick their heads in the sand and claim it’s working, while a $6 billion health care system crumbles.

The for-profit corporations running Medicaid are denying services to disabled, elderly and vulnerable Iowans, and not properly reimbursing health care providers. In turn, health care providers are refusing to treat Medicaid patients, and some have been forced to close up shop. All the while, Iowa taxpayers are forced to shake more money from their pockets for less care. Two of the private, for-profit managed care companies abandoned Iowa and their customers.  MCOs coming and going has made our Medicaid system unstable, and once again another new company is being added, so more upheaval is on the horizon. 

Iowa's privatized Medicaid mess is stressful, even frightening, for many Iowans.  Imagine being pregnant now in this state. Reynolds has kept reimbursement rates so low for labor and delivery in this state that we have seen 17 hospitals shut off services to pregnant moms since her privatized Medicaid program began. You don't ahve to be a mom relying on Medicaid to realize how dangerous it is to have that many hospitals closing their doors to all care, to all women, even if they are private pay. Reynolds has created a labor and delivery care desert in our state. Hospitals aren't even reimbursed to transport pregnant moms however far they need to go to safely delviery a baby. And we know more hospitals are preparing to cut more services, they were planning to do so even before the pandemic, like ICU departments and mental health services. 

Here's the bottom line. Reynolds' privatized Medicaid program isn't saving money. There is no evidence Iowans are better off. We have no data to show Iowans are healthier. If Iowans truly are healthier, we should have known that by now. For profit Medicaid has been a disaster for Iowa's families and health care providers. It is proving to be an even bigger disaster for our state budget and Iowa taxpayers. Governro Reynolds and legislative Republicans should reverse course and join legislative  Democrats in supporting a return to a more efficient, publicly managed system that is not based off of making a profit on the backs of Iowa taxpayers.

 Responding to these comments, Sen. Jeff Edler (R-State Center), who chairs the Senate Human Resources Committee and was not in the Senate when managed care was introduced, said the following:

I appreciate (Sen. Petersen) leading in with the outcome discussion. But I will say also, when I first started I had a pretty high share of MCO complaints; those do not exist anymore. One provider that I had worked with, I actually spoke with them this morning, and I asked them specifically about the MCO reimbursements.. While there are still some issues because of Code changes, things are going pretty well. Also, as far as the saving money, we were just given a document recently from the department that showed those savings. Senator Petersen I'd be more than happy to sit down with you and go over that and field any concerns you have."  

If you are interested in telehealth payment parity (paying providers equally for virtual and in-person visits, instead of a lower rate for virtual visits), you might want to keep listening as Sen. Edler brings up the hundreds of calls and emails he has been getting on the subject and the need for more providers to understand what Wellmark is offering (see attached PDF with a plan to allow providers to "earn up" to 90% payment for virtual visits). 

You can watch or listen to the exchange (closed captioning is not available on the legislative website) here - but you will want to forward it to the time stamp 9:13:30 unless you want to hear the morning prayer, pledge of allegiance, and comments about a Senator's retiring from military service.

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