Health care providers warn Medicaid director of impending crisis

Feb. 23--DES MOINES -- Local health care providers and business leaders seized an opportunity Thursday to talk face-to-face with the two men in Iowa who have the most influence on how the state will move forward on Medicaid.

Department of Human Services director Jerry Foxhoven and Medicaid director Michael Randol spent more than an hour with the delegation of 105 area industry professionals, elected officials and high school students in Des Moines this week for the annual Southeast Iowa Days lobbying event.

Foxhoven, appointed by Gov. Kim Reynolds last June, not only oversees Medicaid but also the food stamp program, assistance for victims of child abuse, mental health services and much more within his $6.5 billion budget.

Much of Thursday's conversation with the Southeast Iowa Days group in a conference room at the Embassy Suites hotel focused on Iowa's Medicaid managed care system implemented in April 2016 by Foxhoven's predecessor, Charles Palmer.

He said the roughly 600,000 Iowans who depend on Medicaid for their health care are comprised of four main groups: children, low-income adults, elderly and the disabled.

"The whole purpose of managed care is to start trying to bend the cost curve so we can be there in the long term," Foxhoven said of the for-profit system former Gov. Terry Branstad created by executive order.

Randol, former Medicaid director in Kansas (which began its managed care system in 2013), was appointed by Reynolds in January.

"Every decision I make is going to be focused on those 600,000 members," he said. "I want to make sure that, as Director Foxhoven said, we have to think about three years, five years, 10 years from now that the Medicaid program is still here. So, we have to have that sustainability and that means we have to have managed care in the state of Iowa."

Wayne Marple, president and chief financial officer of Inhance Corporation, a home health and long term care company in Fort Madison, said it has become increasingly difficult to provide services to Medicaid patients under the managed care approach because of low reimbursement rates and delayed (or nonexistent) payments from the two insurance companies operating in the state.

"What we're being paid is not going to even cover the direct care workers," said Marple. "I talked with several providers from around the state yesterday and they are not accepting any new Medicaid (patients) because the new rates don't even pay them. So people are going without service, and these are people that need home health service or need long term care service."

As Marple pointed out, insurance reimbursement rates for services performed by the health care providers are not set by the managed care organizations, they are established by the state.

"The rates that we've received reimburse us at our cost level back to 2013," Marple said. "Right now there is going to be a larger number of rural Iowans that are denied Medicaid service because no provider, or fewer providers, are going to be providing the service, because to do so would cause them to go into bankruptcy."

Rob Gardner, CEO of the Henry County Health Center in Mount Pleasant, echoed Marple's concerns, particularly when it came to the county's sole ambulance service provided by the hospital.

"I do think there is going to be a crisis in Iowa here very soon because those ambulance services are paid off rates from a long time ago and in rural Iowa, if you lose your ambulance service ...," Gardner said, alluding to the fact there would be no immediate replacement in Henry County.

In November, Gardner and hospital CFO David Muhs told The Hawk Eye HCHC lost nearly $1 million in 2017 largely due to of a lack of reimbursements from the MCOs.

Hope Haven executive director Bob Bartles described Iowa's managed care approach as a "rapidly eroding situation."

Hope Haven provides residential opportunities in southeast Iowa for people with disabilities, in addition to employment, community living and crisis stabilization services, all of which depend on Medicaid dollars.

Bartles was among a select group of health care providers meeting privately Thursday afternoon with Randol for his first working group session on Medicaid since he was appointed.

Because the meeting was not open to lawmakers, members of the public or media outlets, Randol received some criticism for his handling of the meeting, a decision Randol said he stood by.

"I cannot have the legislators and media in that room. It's not going to be a focused group," Randol said. "I want providers to come into that room, feel free to share with me what they believe the issues to be, have that conversation back and forth -- an honest conversation -- and be able to work toward resolution."

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