Auditor report: Iowa Medicaid providers unhappy with privatization

DES MOINES, Iowa — More than half of Iowa Medicaid providers surveyed by the state auditor’s office say privatization has harmed or impeded the quality of care to patients, according to a new report.

State Auditor Rob Sand released a report Monday with the findings of a survey he conducted asking health care providers about their experiences with Iowa’s Medicaid program, which provides health care for more than 700,000 poor and disabled Iowans. The system has been managed by private companies since 2016 when then-Gov. Terry Branstad moved to shift control from the fee-for-service model under the Department of Human Services to privatization.

He sent the survey to a random sample of 2,500 health care providers across several medical professions and 813 responded. 51.5% felt privatization had negatively impacted the quality of care while just 6.1% felt privatization had been beneficial.

Similarly, 54% reported they believed the privatization of Medicaid has harmedor impeded member access to care, while 9.8% said it improved or facilitated access to care. Favorability or satisfaction was higher among professions like chiropractic and optometry, Sand notes.

“When Medicaid was privatized, Gov. Branstad said that it would decrease costs, improve access and improve quality," Sand told reporters during a news conference. "This report is one attempt to take a look at access and quality as well as some figures related to cost from a provider perspective.”

Those that participated in the report provided Medicaid services under the old fee-for-service model and under the current managed care model.

Sand also surveyed 120 hospitals with 71 responding because hospitals are an "integral part of their local healthcare systems."

Nearly 83% the hospitals responding reported they were either extremely dissatisfied or dissatisfied with managed care organization's timeliness and accuracy of payment for services.

91.4% of the hospitals responded settling claims is a more complex process, which is why Sand recommends that DHS "consider the viability of establishing a single set of policies, procedures, and requirements to be implement by all current and future MCOs with which contracts are established."

There are two managed care organizations in Iowa: Iowa Total Care and Amerigroup. Two others have departed the privatized program since its inception.

“There does appear to be from a providers perspective systemic issues related to all of these things,” Sand said. "The numbers speak for themselves."

In January, the Iowa Department of Human Services withheld millions in payments to Iowa Total Care for "compliance issues" that included unpaid bills to providers. The survey was active until December 2019.

Medicaid Director Mike Randol in a statement highlighted these "stronger accountability" measures when managed care organizations fail to comply with the state contracts.

“We value the feedback from all Iowa Medicaid providers and have continued to implement improvements to our Medicaid program based directly on their feedback," Randol said in response to an inquiry about the report. "Our program also includes stronger accountability measures and we withheld funds from a MCO that did not pay providers on time."

Last week, state leaders announced Randol will leave DHS in August to pursue a "job in the private sector," without giving specifics. Randol joined in November 2017 after overseeing the privatized Mediciad system in Kansas.

Read the full auditor report here.