Iowa still considering third Medicaid manager

Oct. 4--CEDAR RAPIDS -- Iowa's Medicaid system made a fairly smooth transition to a new managed care organization in part because state Department of Human Services officials had to travel the path once before since switching to a privately managed system in 2016, according to the system director.

"Overall, I think it's gone well," Iowa Medicaid Enterprises Director Michael Randol told an audience Thursday at The Gazette's Iowa Ideas symposium in downtown Cedar Rapids.

Iowa Total Care, a subsidiary of Centene, joined Amerigroup Iowa in July as a private insurance company contracted by the state to administer coverage for Iowa Medicaid members.

The state's roughly $5 billion program administers health coverage for more than 625,000 poor and disabled Iowans, who had until Monday to realign their choice of insurer after UnitedHealthcare decided last June to exit Iowa's program.

As of Monday, Amerigroup Iowa -- the existing managed care organization -- had 351,392 members and Iowa Total Care had 239,951 members, said Human Services spokesman Matt Highland.

UnitedHealthcare -- whose officials criticized the state for underfunding the Medicaid program, stating it had lost millions of dollars in three years -- announced earlier this year it would leave at the end of June, forcing Medicaid members and health care providers into another transition.

UnitedHealthcare was the second managed care organization to depart since the program privatized in 2016 -- following AmeriHealth Caritas, which exited in 2017.

On Thursday, Randol said that while Iowa is in its third year of managed care. it's more like year one because of the turnover of managed care companies. The changes disrupted efforts to focus on quality and better outcomes as the system works to regain stability.

"I'm confident both are here for the long term," said Randol of the two currently contracted companies.

He told Iowa Idea participants he is confident "the state continues to save money with managed care" versus the old state-run, fee-for-service model. He said he expects Human Services officials will work on actuarial numbers into January before starting a new round of contract talks for fiscal 2021. He also said he expects the state will issue requests for proposals to find a third organization, but did not have a timetable for bringing another private company on board.

Peter Damiano, director of the University of Iowa's Public Policy Center, said there are challenges that managed care organizations face in getting up to speed quickly, which often means "there's going to be some churn and some upset" in the transition.

Damiano said some states have chosen to privatize their Medicaid program on a piecemeal basis while Iowa chose to implement the changeover system-wide, which can create a "huge challenge." Now that Iowa has two companies in place and a stable provider network, he said, it's optional whether Iowa expands. But Randol indicated he would prefer to add a third company in the future.

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