DES MOINES | Iowa officials have submitted waiver requests with the federal government as part of Gov. Terry Branstad's plan to shift Medicaid to a privately run managed care system effective Jan. 1 — a change they expect will provide quality services while saving a projected $51.3 million in the first six months.

State Department of Human Services officials are set to negotiate contracts with four winning private bidders to move to a risk-based Medicaid modernization initiative aimed at improving coordination and quality of care while providing predictability and sustainability for taxpayers in Medicaid spending.

DHS officials say the goal of the new Iowa Health Link program is to improve quality and access, promote accountability for outcomes and create a more predictable and sustainable Medicaid budget for a program that has grown 73 percent since 2003 to more than $4.2 billion in the last fiscal year, including $1.39 billion in state general fund taxpayer dollars.

DHS Medicaid Director Mikki Stier sent a letter to officials in the federal Centers for Medicare & Medicaid Services seeking approval for waivers to establish a statewide managed care delivery system for the majority of Iowa’s 560,000 Medicaid enrollees.

"By requiring mandatory enrollment in managed care, the state will be positioned to improve care coordination among providers and incentivize active management of member's healthcare as a whole," Stier wrote.

"Under the new delivery system, managed care organizations (MCOs) will be responsible for delivering all covered benefits in a highly coordinated manner. The system is intended to integrate care and improve quality outcomes and efficiencies," she added.

The private vendors initially selected in the request for proposals process were Amerigroup Iowa Inc.; AmeriHealth Caritas Iowa Inc.; UnitedHealthcare Plan of the River Valley Inc.; and WellCare of Iowa Inc.

Three competing companies State seeks federal waivers to implement Medicaid managed careState seeks federal waivers to implement Medicaid managed care — Aetna, Iowa Total Care and Meridian — have challenged the selection process on a variety of grounds ranging from evaluator bias to scoring methodology deficiencies, process flaws and potential conflict of interests.

However, DHS Director Charles Palmer has denied their requests for reconsideration. In appeals filed with the agency, attorneys say the DHS intent to award must be overturned and the department ordered to re-evaluate the bids using an independent, disinterested arbiter.

A number of states already have moved to privatized Medicaid programs with mixed results. Amy Lorentzen McCoy, DHS public information officer, said Iowa's waivers are modeled after what has worked in other states and builds on Iowa’s previous experience with managed care in seeking to expand the approach to the state's entire Medicaid population.

"We've been working regularly with CMS on all of these waiver submissions, so we feel pretty confident about being able to go through the process and get the approvals that we need," she said Thursday.

In her letter, Stier said Medicaid members and providers in Iowa will be notified in advance of the transition through client letters and general public announcements. Information will include relevant changes in service delivery, managed care plan assignment, plan descriptions and contact information, procedures for electing a different plan, and general member rights.

"The state will ensure continuity of care for transitioning Iowa Plan members by requiring that MCOs honor existing authorizations for covered benefits for a minimum of ninety (90) calendar days, without regard to whether such services are being provided by contract or non-contract providers," Stier wrote.

"In addition, plans will be required to identify existing prior authorization decisions, and will be responsible for providing receiving plans with information on member service authorizations, utilization data, and applicable clinical information including, but not limited to, disease management or care coordination notes,” she added.

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