DHS waited 30 days to disclose AmeriHealth's possible exit from Iowa's Medicaid program

AmeriHealth gave state administrators 60 days’ notice that it intended to quit helping manage Iowa’s giant Medicaid program, but state officials waited 30 days to inform the public, a top administrator told legislators Wednesday. 

AmeriHealth’s abrupt departure from the system is happening because its leaders and state officials failed to agree on how much the company should be paid to cover care for about 215,000 poor or disabled Iowans.  Many families and care-service providers are now scrambling to figure out what will happen when AmeriHealth members' coverage shifts to another company Dec. 1.

AmeriHealth’s looming exit from Iowa’s controversial Medicaid managed-care system was announced Oct. 31 in a Department of Human Services press conference.

Department Director Jerry Foxhoven told legislators Wednesday that AmeriHealth filed a formal notice 60 days before its Nov. 30 exit, as required under its contract. But he said that after the filing was made, the two sides continued to negotiate over its rates, and he continued to hope an agreement could be worked out. “We didn’t get there. At some point, we needed to pull the plug and say, all right, we can’t continue negotiating any further,” he said.

Foxhoven offered the timeline during testimony Wednesday before a Medicaid oversight committee, made up of 10 Iowa senators and representatives.

Afterward, a Democrat on the committee said the department should have quickly told legislators and the public AmeriHealth had filed a formal notice that it intended to exit the market.

“DHS promised us transparency,” said Sen. Liz Mathis, D-Robins, who is a leading critic of private Medicaid management. “…They should have been transparent about that. People have to plan their lives around this. There are people that are at a real disadvantage now, because they only have 30 days to figure out the lives of their children or the lives of a parent that they’re trying to take care of.”

AmeriHealth has the largest share of members of any of the three Medicaid-managed care companies working in Iowa. AmeriHealth’s members include about three-quarters of Iowa Medicaid recipients who have serious disabilities. All of its members are to be auto-enrolled into UnitedHealthcare coverage on Dec. 1, unless they choose the third company, Amerigroup.

One of the possible complications is that some health care services providers that had contracts with AmeriHealth do not have them with UnitedHealthcare.

One such service company is Link Associates, which works with central Iowans who have intellectual disabilities. The agency’s executive director, Linda Dunshee, said after Wednesday’s meeting that she is scrambling to set up a contract with UnitedHealthcare. She wishes she’d known a month earlier that she might have to do so. “I don’t know why that had to be a secret,” she said of the fact that AmeriHealth had filed a formal notice of intention to leave the Iowa market.

Dunshee said she and others would have understood if the department had announced that AmeriHealth had filed the notice of intent to leave but that contract negotiations were continuing. “They could have said it was just tentative,” she said.

In a brief interview after the meeting, Foxhoven said he had no regrets about deciding not to make a public announcement as soon as AmeriHealth filed the 60-day notice. He said he still doesn’t think the company intended at that point to exit the market. “They just notified us in case” the negotiations didn’t work out, he said.

Foxhoven told legislators that he recognized that Medicaid members and service providers were having to scramble because of the short notice of AmeriHealth's departure. He said that to prevent such a situation from recurring, he got UnitedHealthcare to agree to give the state at least six months' notice if it ever decides to leave Iowa's Medicaid market. Amerigroup recently signed a contract agreeing to give at least 90 days' notice, he said. 

During Wednesday’s Statehouse meeting, Foxhoven and leaders of the three management  companies pledged to make the quick transition of 215,000 Medicaid members go as seamlessly as possible.

"Our focus is ensuring members get the care they need,” said Kim Foltz, Iowa chief executive officer of UnitedHealthcare.

Foltz’s company has reported losing hundreds of millions of dollars helping run Iowa’s Medicaid program since the state shifted to private management last year. By taking on all of AmeriHealth’s Iowa customers, UnitedHealthcare will more than double its share of the market. But Foltz said her company can find firm financial ground here while helping Iowans maintain their health. Even among Iowans with serious disabilities, “we see a great opportunity,” she said.

The Register sought comment Wednesday afternoon from Iowa Gov. Kim Reynolds about her administrator's delay in making a public notification about AmeriHealth's possible departure. Reynolds, a Republican, is a strong supporters of private management of the $4 billion Medicaid program and she appointed Foxhoven to his post.

Reynolds' spokeswoman, Brenna Smith, released a statement that did not address the timing issue but reiterated the governor's support for the overall effort and said the state would help people who need to shift from AmeriHealth coverage to one of the other two companies. "The Iowa Department of Human Services has developed a transition plan to ensure members will continue to receive quality care as health plan options change," Smith wrote. "DHS will be working closely with, and monitoring, patients as they transition from one health plan to another. Ensuring continuity of care will be a key focus."