Iowa agrees to give Medicaid management firms 7.5% raise to continue running program

Iowa has agreed to give 7.5 percent more state money to the two private companies managing its $5 billion Medicaid program, officials announced Friday. ... The new agreements cover the current fiscal year, which began July 1. The increase in state spending is more than double the 3.3 percent increase the state agreed to for last fiscal year. Overall, the new contracts will give the two companies raises of 8.4 percent in state and federal money, totaling $344 million.

https://www.desmoinesregister.com/story/news/health/2018/08/24/iowa-medicaid-management-firms-7-5-percent-raise-unitedhealthcare-amerigroup-privatized-care/1084796002/

Health-care advocates say that while there may be nothing wrong with managed care, the privatization switch was too much, too soon, with 600,000 individuals moved over into the new system all at once.

In August, Reynolds fired a Medicaid adviser who had questioned the numbers. “The state essentially handed over the program to three proprietary companies and has not managed the program,” complains Kirk Norris, president and CEO of the Iowa Hospital Association.

Norris warns that the new system may actually cost the state money in the long run. Brenna Smith, communications director for the governor, insists that the opposite is true. “DHS’ newly released analysis reflects that our Medicaid program is the only way to ensure a responsible and sustainable program, as health-care-related costs continue to rise,” Smith says.

Time will tell who’s right. That, and the auditor’s report. And, if the complaints about nonpayment for services are seen as valid, potentially some lawsuits.