Iowa

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Medicaid Managed Care

On January 20, 2015, state legislators announced Governor Terry Branstad’s plan to transition Iowa’s Medicaid program to private MCOs.  The Department of Human Services plans to release an RFP for managed care plans by March 1, 2015; the new program’s implementation target date is January 2016.  The estimated cost savings during the first six months of 2016 is $51.3 million.  (Source:  Des Moines Register, 1/20/2015)

On February 16, 2015, the Iowa Department of Human Services posted the Iowa High Quality Healthcare Initiative Request for Proposals (RFP) on its website, inviting health plans to bid to manage the state’s Medicaid managed care program. DHS intends to award two to four statewide managed care contracts in order to expand Medicaid managed care enrollment to at least 550,000 individuals, beginning in January 2016.

Contracts awarded under the RFP will cover nearly all Medicaid beneficiaries in Iowa, including LTSS recipients in nursing facilities and HCBS settings; dual eligibles; foster care populations; and the Iowa Health and Wellness Program expansion population. Individuals covered by the Health Insurance Premium Payment program; undocumented immigrants receiving temporary coverage; and voluntary PACE enrollees will be excluded from enrollment. Native Americans will have the option for voluntary enrollment.

Proposals are due on May 8; a notice of intent to award is scheduled for July 31; and the go-live date is scheduled for January 1, 2016. (Source: American Journal of Managed Care, 2/17/2015; Iowa Department of Administrative Services website)
Iowa High Quality Healthcare Initiative RFP (2/16/2015)

On May 8, 2015, the Iowa State Senate passed a budget placing limits on transitions to managed care. If adopted, the budget will cap profits for managed care contractors; create a commission to oversee transitions to managed care; and ban reductions in provider rates. The budget will now move to the Iowa House for debate. (Source: AJMC, 5/8/2015)

On August 17, 2015, the Iowa Department of Human Services announced the four managed care organizations (MCOs) that will provide services to the states’ 560,000 Medicaid beneficiaries beginning January 1, 2016. The four firms are Amerigroup Iowa, AmeriHealth Caritas Iowa, UnitedHealthcare Plan of the River Valley, and WellCare of Iowa. The new managed care program includes responsibility for long term services and supports (LTSS). (Source: Iowa DHS , 8/17/2015) 

Iowa’s plan for transitioning its Medicaid program to managed care by January 1, 2016, has continued to face criticism for its very ambitious timeline and concerns regarding the impact on beneficiaries. On October 9, 2015, the state officially announced the signing of contracts with the four managed care organizations (MCOs) that will have responsibility for the states approximately 560,000 Medicaid enrollees. However, the plan has faced pushback from state Senate Democrats who say the transition should be delayed, and have raised questions over the estimated $51 million dollars in savings over the first six months of the transition. (Source: AJMC 10/20/2015)

Iowa’s transition to Medicaid managed care (Iowa Health Link) has led to a significant amount of administrative review and judicial action over the past several months. Court filings in November alleged inappropriate communication between the State Medicaid Director and a private consultant, which was followed by a lawsuit from the Iowa Hospital Association and 11 leaders of hospitals to halt the shift to managed care. More recently, an administrative judge recommended that the state withdraw its contract with one of the four winning bidders for the Iowa Health Link program, WellCare.  Following a review by a high-level Iowa Medicaid official, the contract was terminated.  WellCare has filed suit challenging this decision.  Other managed care plans who were not selected in the procurement have also appealed, arguing that the process was flawed and the bids should be resolicited and rescored.  

On December 17, 2015, CMS wrote to the Iowa Medicaid Director delineating concerns about the proposed transition timeline, and requiring that Iowa delay the start of the IA Health Link program to March 1, 2016. In order to exhibit proper readiness by March 1, Iowa must address 16 key actions, including: developing comprehensive communication mechanisms and call center capacities; address provider network deficiencies; establish a fully functioning LTSS Ombudsman, and; ensure all MCOs have proper pharmacy systems in place before the transition takes place.(Source: Iowa Letter, link no longer available;  The Des Moines Register 12/22/2015)

Iowa's transition to Medicaid managed care (Iowa Health Link) was officially approved in a CMS letter dated February 23, 2016. CMS recognized the implementation progress the state has made and authorized a start date of April 1, 2016, in order to allow for a smooth and effective transiton. (Source: CMS Letter 2/23/2016)

On April 13, 2016 the Des Moines Register reported that Medicaid Director, Mikki Stier, has advised state lawmakers that the transition to managed care is going well. Despite some issues that have been identified the state’s call center has handled over 18,000 consumer calls, while reducing the wait time for callers to an average of 20 seconds. Some lawmakers remain skeptical of the shift to managed care, and continue to press for greater state oversight of the three MCOs responsible for managing care for Medicaid beneficiaries. (Source: Des Moines Register 4/13/2016)

On May 13, the Iowa Legislature sent a bill that included additional oversight for the state’s Medicaid managed care organizations (MCOs) to the governor, which was signed into law on May 27, 2016. (Source: Des Moines Register 5/9/2016; Iowa Legislature 6/9/2016)  
 
On July 14, 2016, The Gazette reported that at a meeting in Iowa, the Department of Health and Human Services (HHS) Secretary Sylvia Burwell stated that the Federal government would look into numerous claims of Medicaid providers receiving delayed payments or sometimes not being paid at all following the state’s transition to Medicaid managed care. On April 1, 2016, Iowa transitioned its entire Medicaid program to managed care, which is overseen by three managed care organizations (MCOs): Amerigroup Iowa, AmeriHealth Caritas Iowa, and UnitedHealthcare of the River Valley. (Source: The Gazette 7/15/2016)
 

On August 26, 2016, the Iowa Department of Human Services (DHS) released a report containing data for the first quarter of the state’s new managed care program, Iowa Health Link, which includes April, May and June 2016. Three MCOs—Amerigroup, AmeriHealth, and UnitedHealthcare—coordinate care for Iowa Medicaid beneficiaries. Of the 567,813 beneficiaries, the breakdown by plan is as follows:

  • Amerigroup - 184,134, or 32 percent;
  • Amerihealth – 208,381, or 37 percent; and
  • UnitedHealthcare – 175,298, or 31 percent.

Beneficiaries have the ability to disenroll from one plan and enroll in another within the first 90 days of their IA Health Link enrollment. Of the three MCOs, UnitedHealthcare had approximately 9,000 members change plans, Amerigroup 4,000, and AmeriHealth 1,000.

In terms of LTSS, as of June 2016 Iowa has 13,879 individuals (38 percent of LTSS enrollees) receiving facility-based services—that is, residents residing in an ICF/ID or nursing facility. 62 percent of LTSS beneficiaries, or 22, 586 individuals, receive home and community based services (HCBS). The LTSS managed care enrollment population of 36,465  breaks down by health plan as follows:

Plan

Total LTSS Enrollment

Percent in institutional settings

Percent in home and community based settings

Amerigroup

7,597

59

41

Amerihealth Caritas

22,496

25

75

UnitedHealthcare

6,372

59

41

The Iowa DHS spent approximately $331 million on Iowa Health Link, which is $22 million less than the state projects it would have spent without the implementation of statewide managed care. The state also believes that it is on track to save $110 million for the first year. (Source: IA MCO Report 8/26/2016)

On October 31, 2016, Radio Iowa reported that Iowa would pay the three MCOs an additional $33 million. The state still expects to reap more than $140 million from the transition, and the additional funds are being allocated largely due to rapidly increasing prescription drug costs. (Source: Radio Iowa 10/31/2016)

On November 22, 2016, the Globe Gazette reported that the Iowa Department of Human Services (DHS) estimates it will save $118.7 million during the current fiscal year due to the implementation of statewide managed care. DHS calculates that it would have spent $1.716 billion if the fee-for-service system were still in place, instead of the $1.694 billion the state will spend under managed care. (Source: Globe Gazette 11/22/2016)

On November 30, 2016, the Iowa Department of Human Services (DHS) released the second quarterly report on the state’s shift to managed care for the operation of the state’s Medicaid program, which covers the period of July-September. As of September 2016, total managed care organization (MCO) enrollment in Iowa equaled approximately 568,000 enrollees.

In terms of long term services and supports (LTSS) enrollment, as of September 2016 Iowa has 14,015 individuals (38 percent of LTSS enrollees) receiving facility-based services—that is, residents residing in an Intermediate Care Facility for Individuals with Intellectual Disabilities (ICF/ID) or a nursing facility. 62 percent of LTSS beneficiaries, or 22, 810 individuals, receive home and community based services (HCBS). The LTSS managed care enrollment population of 36,825 breaks down by health plan as follows:

Plan

Total LTSS Enrollment

Percent in institutional settings

Percent in HCBS settings

Amerigroup

7,556

60

40

AmeriHealth Caritas

23,102

26

74

UnitedHealthcare

6,167

58

42

 
An article from the Quad-City Times notes that recent financial filings from two of the MCOs, Amerigroup Iowa and AmeriHealth Caritas, show that they are losing significant sums, in excess of $100 million dollars each. However, statements from the Iowa governor’s office as well as the MCOs push back on the reported losses, claiming that they are simply start-up costs and will abate as the MCOs further adjust to the Iowa market (Source: IA MCO Report 11/30/2016; Quad City Times 11/30/2016; KCRG.com 12/2/2016)

On December 21, 2016, the Des Moines Register reported on ongoing discussions between the state and the three managed care organizations (MCOs) responsible for managing care for the state’s 500,000-plus Medicaid population. In documents obtained by the Register, the three MCOs argue that the reimbursement rates set by the state significantly underestimated the cost of managing care for the state’s Medicaid recipients. In letters from two of the MCOs, Amerigroup anMore Colors...d UnitedHealthcare, they recommend a number of courses of action, including:

  • Increased flexibility surrounding prescription drugs;
  • Implementing a risk corridor proposal; and
  • Adjusting reimbursement rates for the Health & Wellness population – the state’s Medicaid expansion – to better correspond with MCOs actual experiences. (Source: The Des Moines Register 12/21/2016; Amerigroup Letter 11/10/2016; UHC Letter 11/18/2016)   

On March 10, 2017, Iowa Health Link released the most recent quarterly report for State Fiscal Year (SFY) 2017, which contains data on the states’ comprehensive managed care program. As of January 31, 2017, enrollment stands at 567,943 enrollees.

In terms of LTSS enrollment, as of January 2017 Iowa has 13,858 (37.2 percent) receiving facility-based services. 62.8 percent of beneficiaries, or over 23,000, receive home and community-based services (HCBS). The LTSS managed care enrollment of 37,219 breaks down by health plan as follows:

Plan

Total LTSS Enrollment

Percent in institutional settings

Percent in HCB settings

Amerigroup

7,633

57.9

42.1

AmeriHealth Caritas

23,310

25.4

74.6

UnitedHealthcare

6,276

56.2

43.8

Iowa estimates it will accrue $118 million in savings this year from the shift to managed care. (Source: IA MCO Report 3/10/2017)

Iowa has implemented a risk corridor agreement with the three MCOs that will be in effect through June 30, 2017. This means that the state - and federal - government will share in the losses (and profits if applicable) incurred by the MCOs. The state has asked CMS to cover all but $10 million of the estimated losses under the risk corridor; the remaining $10 million would be the state's responsibility but would bot be incurred until 2019. (Source: KMA Land 3/28/2017;  Des Moines Register 3/29/2017)

On June 19, 2017, the Iowa Department of Human Services (DHS) released the third quarterly report for state fiscal year (SFY) 2017, which covers the January – March period. As of April 10, 2017, total enrollment in Medicaid managed care in Iowa stands at 573,001

In terms of LTSS enrollment, 13,692, or 36.7 percent, are receiving facility-based services, and 23,655 enrollees—63.3 percent—are receiving community-based care. The LTSS managed care enrollment of 37,347 breaks down by health plan as follows: 

Plan

Total LTSS Enrollment

Percent in institutional settings

Percent in HCB settings

Amerigroup

7,641

55.9

44.1

AmeriHealth Caritas

23,403

25.5

74.5

UnitedHealthcare

6,303

54.7

45.3

Iowa DHS continues to estimate it will save $118 million through its shift to managed care this year. (Source: Quarterly Report 6/19/2017)

On October 31, 2017, the Iowa Department of Human Services (DHS) announced that AmeriHealth Caritas, one of the three managed care organizations (MCOs) providing and coordinating services for the state’s Medicaid managed care program (IA HealthLink), is withdrawing from the program effective November 30, 2017. The other two MCOs, UnitedHealthcare and Amerigroup, will continue to provide care through fiscal year 2018, and will absorb AmeriHealth Caritas’ members. AmeriHealth Cartias, during a legislative hearing, stated that their reason for exiting the program was that they were not able to come to terms with the Iowa Department of Human Services (DHS) regarding future capitation rates. In addition to being one of three MCOs in the Iowa Medicaid managed care market, AmeriHealth also had the highest proportion of beneficiaries receiving LTSS. Some Iowa lawmakers are proposing to carve out LTSS from managed care and return it to fee-for-service (FFS). (Source: IA DHS Press Release 10/31/2017)

On the same day, the Iowa DHS released a request for proposals (RFP) for one or more MCOs to operate in IA Health Link. Eligible bidders must currently deliver Medicaid managed care services in at least one other state or have a parent company that has experience which can be substituted for this requirement. Iowa DHS anticipates awarding contracts for an initial three years and three months, with the possibility of an additional two-year extension. Interested bidders must submit proposals by January 5, 2018, and DHS intends to announce awards February 27, 2018. Contracts would begin July 1, 2018. (Source: RFP 10/31/2017)

State Demonstration to Integrate Care for Dual Eligible Individuals (Withdrawn)

In May 2012, the state submitted to CMS a Financial Alignment Demonstration Proposal to provide full benefit dual eligible access to comprehensive coordinated care management through a Health Homes model.  The target population is persons with I/DD, and the proposed reimbursement model is a “Health Homes in a Fee-for-Service environment”. The originally proposed implementation date was January 1, 2013, but the MOU is still pending.  (Source:  Demonstration Proposal; NASDDS Managed Care Tracking Report Vol.1 No.2; NSCLC Dual Eligibles website)

As of July 2014, the state has withdrawn from the Financial Alignment Demonstration.  (Source: Kaiser Duals Demonstration Proposal Status Map, 7/2014)

Balancing Incentive Program

In June 2012, CMS awarded the state an estimated $61.8 million of enhanced Medicaid funds (a 2% enhanced rate).  (Source: Iowa Medicaid Enterprise Endeavors Update; State BIP website)
BIP application (Submitted to CMS: 4/30/2012)
CMS Award Announcement (6/13/2012)
IME Bureau of Long Term Care Revised Work Plan (1/2013)

Section 1915(i) HCBS State Plan Option

As of May 2014, CMS has approved the state’s §1915(i) HCBS State Plan Amendment; and the state is currently participating in the HCBS State Plan Option. (Source: Kaiser HCBS State Plan Option website, 5/2014)

Health Homes

In June 2012, CMS approved Iowa's first Health Home State Plan Amendment to implement Health Homes for individuals with two chronic conditions or one chronic condition with the risk of developing another chronic condition. (Source: CMS Health Homes Matrix, 6/2014)
Approved Health Homes State Plan Amendment, link no longer available (6/2012)
State Website on Health Homes

In June 2013, CMS approved Iowa’s second Health Home State Plan Amendment to implement Integrated Health Homes (IHH) for adults and children with SPMI. (Source: CMS Health Homes Matrix, 6/2014)

On June 23, 2014, CMS approved Iowa’s third Health Home SPA, for the Phase III expansion of the state’s SPMI Health Home Program for Medicaid eligible individuals as authorized under Section 2703 of the Patient Protection and Affordable Care Act. (Source: Medicaid State Resource Center website;  Approved Health Home SPA, 6/23/2014