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A royal flush of managed care mischief

Private insurance companies may be laying down all their cards and expecting to collect the pot, but state auditors are calling their bluff, per an October 20 article in U.S. News & World Report.

Ohio, Mississippi, Arkansas, Illinois – and now, Iowa.

By this point, you could probably tell the tale of misused state dollars as well as we can…but here we go again.

In 2016, Iowa Governor Terry Branstad shifted the state’s Medicaid program to private insurers. The Medicaid program provides health coverage for more than 780,000 Iowans with low incomes or disabilities, and like elsewhere, the sales pitch was that private companies can certainly manage the complex administration of Medicaid better than the rusty ol’ government, right?

Not quite. According to a new state audit reported in U.S. News & World Report, allegedly, Iowa’s privatized Medicaid program has been illegally denying services to program recipients. What’s more, both of the private insurance companies that are managing the system have violated terms of their contracts with the state.

Iowa state Auditor Rob Sand investigated cases from 2013-2019, noting that the period after privatization saw an almost 900 percent increase (!!!) in cases where a judge restored services, citing that the private insurance companies had illegally denied the coverage.

“What this means is that privatized Medicaid is less likely to treat Iowans in accordance with the law. It means that the Medicaid MCOs that we have contracted with are not upholding their end of the bargain,” Sand is quoted as saying.

Turns out, maybe private companies can’t manage Medicaid better than the government.

And it’s not just a denial of major healthcare services, but critically important ongoing care: “This has resulted in members going without services, such as bathing and wound care, thus violating the contract, and state and federal law, while the company still receives payment for their care,” Sand said in the report.

And who are these private carriers? Per the report, the two companies managing the Medicaid program are Amerigroup and Centene Corp.

The very same Centene that paid $15.2M to Arkansas, $56M to Illinois, $55.5M to Mississippi AND $88.3M to Ohio for allegations that it overcharged Medicaid programs. Cool, cool.

Now, in all fairness, Iowa’s own Medicaid director argued that there were some flaws in the report, claiming that it made “apples to oranges comparisons.” Not to be glib, but that’s the point. It was an apple, now it’s an orange, and according to patient Kurt Yeoman, the orange is worse.

Yeoman said the experience of dealing with managed care companies causes him anxiety.

“Ever since it was privatized, I mean, things have gone downhill,” he told local news station We Are Iowa. “It’s just the stress that’s involved with it is overwhelming.”

Leaders keep letting politicians and payors convince them that private companies can care for their citizens better and more efficiently, only to discover that this isn’t the case. So, in all seriousness, we have to ask if states are learning their lessons.

The Centers for Medicare and Medicaid Services (CMS) are concerned about the arrangement, too. They are now questioning the future of Medicare Advantage plans based on studies from government watchdogs and experts that suggested, “Medicare Advantage plans may be making their beneficiaries look sicker than they really are to maximize payments from the federal government.”

It does seem like regulators are catching on but we’re unsure if it’s happening fast enough. When will there be an official crackdown on this kind of behavior? Are these audits and settlements happening quickly enough? And what’s the end game here – just more fines?

Frankly, we just want this card game to end. Because when all is said and done, the patients end up losing the most.


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