Survey shows Iowa providers don't like privatized Medicaid

A majority of health care providers are dissatisfied with Iowa’s privatized Medicaid program, saying access to care hasn’t improved for the more than 650,000 people who rely on the system and that reimbursements are slow and difficult to secure, according to a survey released Monday.

State Auditor Rob Sand said his survey reinforces long-held complaints about the change from a state-run system in 2016.

“It appears from these numbers the anecdotal reports of providers having problems with payment and problems with providing care appear to be more than just anecdotal reports. There do appear to be from a provider’s perspective systemic issues related to all of those things,” Sand said.

Four years ago, then-Gov. Terry Branstad shifted Iowa's state-run Medicaid system to a model managed by private insurance companies. The Republican promised it would save money and improve care and efficiency for the low-income and disabled people served by the program. Despite complaints that the cost savings are not evident and that access to care has worsened for patients, Gov. Kim Reynolds, who succeeded Branstad the following year, has repeatedly said it would not be practical to return to a state-run system.

Sand's office conducted the Medicaid survey in November and December, and 877 providers responded, including hospitals, nursing homes, medical clinics, doctors, home health and mental health providers. The survey was conducted online and has a statistical margin of error of plus or minus 3 percentage points.

Of the respondents, 54% said they believe the privatization of Medicaid harmed or impeded patient access to care, 36% believe there has been no impact, and nearly 10% said privatization has improved access to care.

Nearly 66% of providers said settling claims for payment is now more complex and takes longer, and about 60% reported that their costs associated with staffing and administration have increased.

Of all the medical providers, hospitals were most critical of the privatized system, with 83% saying they are dissatisfied with Medicaid. A large majority of hospitals that responded said they are paid in a less-timely manner, have seen their costs increase and that the settling of claims is more complex.

Iowa Medicaid Director Mike Randol, who announced last week he was leaving the job, said the state has strengthened accountability measures, including withholding funds from the management companies who failed to pay providers on time.

“Oversight of our managed care organizations is essential to ensuring providers are supported by timely and accurate payments so they can continue to provide critical care for Iowans," he said in an email statement.

Sand recommended that the state consider establishing a single set of procedures to be followed by all insurers hired by the state to manage Medicaid cases. Currently, each Medicaid management company has its own standards for approving services, claims coding and claims processing, forcing medical providers to deal with multiple payment systems.