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Branstad decries Medicaid privatization 'scare' tactics

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DES MOINES – Gov. Terry Branstad expressed concern Monday that some health-care providers are using “scare tactics” and misinformation to undermine his administration’s effort to begin the transition to a privately managed Medicaid service delivery system beginning Jan. 1.

Some providers in mental-health, assisted living and other service areas that rely on Medicaid for treatment have expressed concerns that the state’s plan to privatize Medicaid services includes a new payment system that could cut their reimbursements enough that it could force smaller organizations to close.

However, Branstad told reporters Monday that is not the case because providers who sign new contracts under the managed care system will receive the same reimbursement rates as is currently established. However, he said the new fees may be based more on outcomes than procedures performed which could mean lower profits for some providers.

The Iowa governor said the new system is based on what already works in 26 other U.S. states that have switched to managed care, some using one or more of the four private companies that Iowa has entered into contracts with to begin managing care for about 560,000 Medicaid enrollees in Iowa.

“There’s a lot of misinformation being put out by some people that are trying to scare people.

I don’t like these scare tactics. I think we need to give people accurate information,” Branstad told his weekly news conference. “I know there are some people that always fear change and that you have some people that are fanning those fears.”

Branstad said state Department of Human Services (DHS) officials have used a thoughtful, deliberative process modeled after other states’ experience in concert with federal guidelines to come up with a Medicaid system designed to deliver better outcomes for patients and while being more predictable for the state than the current “antiquated” system. Providers who sign contracts under the new approach will receive 100 percent reimbursement, he said, with mental-health services phased in over six months and long-term care over two years.

“I understand that some providers kind of like the present system because the more procedures you do, the more you get paid,” Branstad told reporters. “I guess it bothers me that we have some people, because they think they may not make as much profit off the new system based on health outcomes than they will under the old system based upon procedures, would want to oppose this new system.”

Recently, the state’s plan to transition its $4.2 billion Medicaid program that has about 560,000 enrollees into a privately managed care system hit multiple snags.

The Centers for Medicare and Medicaid Services — the federal agency that ultimately will approve the move — sent a letter to Iowa Medicaid Director Mikki Stier questioning the state’s readiness and laying out a handful of concerns, although Branstad said he met with CMS officials in Washington last week and had a productive discussion.

Also, a group of providers have filed a petition for declaratory judgment and injunctive relief with the Polk County District Court, asking the court to delay the implementation of managed care until a legal conflict is addressed.

DHS officials have awarded contracts to four managed care companies — Amerigroup Iowa, AmeriHealth Caritas Iowa, UnitedHealthcare Plan of the River Valley and WellCare of Iowa. Three companies that were not awarded contracts have challenged the state’s bidding process, saying there was improper contact between the state and a winning bidder among other concerns.

Reach Rod Boshart at 515-243-7220 or rod.boshart@thegazette.com

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