Iowa Dems Aren't Satisfied With Managed Medicaid Audit

by Lauren Flynn Kelly

Iowa's 2016 transition from fee-for-service to managed Medicaid was a hot-button topic this past election cycle as Democrat Fred Hubbell campaigned for governor with the promise of returning the program to a publicly managed system. A new report from State Auditor Mary Mosiman (R) is adding fuel to the fire over the controversial IA Health Link program that state Democrats want to dismantle.

According to the report, the state in fiscal year (FY) 2018 is projected to save approximately $126 million from the transition to managed care. But the report noted that three different estimates for FY 2018 savings have been prepared using various methodologies, ranging from as little as $47 million to as much as $234 million.

Only one estimate — $141 million projected by the Iowa Dept. of Human Services (DHS) in May 2018 — was found to be reliable because it accounted for all Medicaid costs and relied on historical trend information to determine what the cost may have been under the previous program. Based on the DHS methodology used in May 2018, the new report made an updated estimate of $126 million.

The report also noted that initial capitation rates for the program were set in July 2015 but a subsequent review by Milliman resulted in an "emerging trend adjustment" that amounted to an additional $379 million paid to plans in 2017 for FYs 2016 and 2017. Not long after the three managed care organizations that originally contracted with the state began serving the program, they reported financial losses and argued that the rates were not actuarially sound. One insurer dropped out of the program and the remaining two negotiated an 8.4% increase in rates for 2019.

The report contained an adjusted estimate for average cost-per-member growth of 1.5% in FY 2018 and 5.6% in 2019, compared with CMS projections of 5.8% on average between 2017 and 2026. Mosiman suggested that over time such estimates will become less accurate and less meaningful as the program gets further from FFS.

Rob Sand, the Democratic former assistant attorney general who recently defeated Mosiman in the race for state auditor, criticized the report for not assessing the impact on quality or timeliness of services provided to Medicaid beneficiaries under the FFS or managed care program. In a Nov. 26 post to Twitter, Sand vowed to dig deeper after he takes office on Jan. 1, 2019.

From RADAR on Medicare Advantage