Branstad scoffs at criticism of Medicaid managed care

Gov. Terry Branstad dismissed criticism of his move to privatize management of Iowa's Medicaid program, saying Monday the change is eliminating fraud and abuse and saving taxpayers millions of dollars.

Medicaid health insurance, which serves 560,000 low-income Iowans at a cost of about $4.2 billion annually, has had its management shifted to three private companies after previously being operated by the government. State legislators say they have been swamped with complaints about the changes. In particular, hospitals, nursing homes, mental health agencies and other service providers say that management firms are failing to pay bills quickly and accurately. Some providers say they are being forced to borrow money to meet payrolls, and there have been reports of layoffs and plans to cut services.

Branstad scoffed at the negative assessments at his weekly news briefing Monday, saying, "Well, that is The Des Moines Register's opinion." He was referring to the Register's editorials, which have suggested the managed-care initiative has been a failure that is killing Iowa health care jobs and hurting health care services for poor Iowans while for-profit firms pocket hundreds of millions of dollars in administrative costs.

Medicaid managers report millions in Iowa losses

The Republican governor said the shift to private management represents a huge undertaking but he has been getting good reviews about its implementation.

"The reports that we have been getting have been that this new system of managed care replacing the unmanaged care that we had before is stopping significant fraud and abuse that had occurred previously in our state and across the country, and that it is designed to improve health care outcomes," Branstad said.

When complaints have been received, they have been resolved, but oftentimes medical providers have not followed the rules, the governor added.

"Before, when you had unmanaged care, you submitted the bill and you got paid. You didn't know whether the service was ever provided. Now we are verifying to see that the service is provided. And obviously that may delay it a day or so," Branstad said. "My understanding is that basically nine days is the average; previously it was eight. And so with an extra day, it can save tens of millions of dollars.

"To me, it makes a lot of sense in protecting the interests of the taxpayers, as well as making sure that the Medicaid recipient is getting the services that they deserve."

The governor suggested that some criticism stems from partisanship and a confrontational attitude, which he said he isn't interested in. "Our interest is to provide the very best services and when there are shortcomings or problems, I encourage them to contact our office," he said.

Branstad also said he doesn't have a figure yet on the amount of fraud and abuse that is being prevented. But he noted that the state budget anticipates a cost savings of more than $100 million annually by shifting the Medicaid program to private management.

State Sen. Amanda Ragan, D-Mason City, who chairs a Senate health and human services budget subcommittee, countered Branstad's statements, saying legislators across the state have heard complaints from health care providers and recipients about a wide array of problems, including slow payments and other issues.

"Gov. Branstad is clearly hearing from a different group of people than I am. We are still hearing concerns on a daily basis," Ragan said. "They are telling us that things are not OK."