Hubbell hears about local providers’ Medicaid ‘disaster’

Democratic candidate for governor Fred Hubbell, left, listens as Mid-Iowa Community Action Health Services Director Gloria Symons makes a point about Medicaid reimbursement at a meeting Friday in the public library’s conference room.

Democratic candidate for governor Fred Hubbell got an earful from one local provider who serves a large number of Medicaid patients.

Substance Abuse Treatment Unit of Central Iowa Executive Director Vicki Lewis called the state’s Medicaid program, run by two managed care companies, “a disaster.” Hubbell met with representatives from SATUCI, Mid-Iowa Community Action and Center Associates Friday at the Marshalltown Public Library.

He asked them to tell of their experiences in dealing with the two managed care companies hired by the state to run the state-funded Medicaid program.

Because of the kind of clients served and agency services provided, the three had equally different levels of experience.

One common denominator is that they are not-for-profit, and rely on prompt and accurate reimbursements from the managed care companies.


Medicaid privatization as it is now known was established in 2015 by former Gov. Terry Branstad. Branstad eliminated Iowa’s state-run Medicaid organization and replaced it with oversight from three private managed-care companies.

He and many Republican legislators claimed they would be more cost-efficient in running Medicaid, theoretically saving tax dollars. Initial estimates were savings of $100 million with no reduction in Medicaid services. The $100 million was later revised to $50 million.

The three MCOs were Amerigroup Iowa Inc., AmeriHealth Caritas Iowa Inc. and United Healthcare Plan of the River Valley Inc. AmeriHealth departed, leaving Amerigroup and United Health Care.

Providers’ perspective

“In my experience this entire Medicaid adventure has been a disaster,” Lewis said. “We are not new to managed care, we were under Magellan for 20 years. But now we are living with two (care providers) and unpredictable situations. We never know what is going to be paid and what will not be paid … we are having the most problems with United Health Care.”

Lewis said SATUCI found it necessary to hire an additional employee to manage billing because the MCO system remains complex. In previous meetings, Lewis said SATUCI derives significant amount of overall agency income from Medicaid reimbursement. SATUCI provides substance abuse disorder treatment outpatient and education in Hardin, Marshall, Poweshiek and Tama counties.

Rates substance abuse agencies may charge for care were set 20 years ago by Magellan, which significantly compounds the problem, Lewis said.

“The rates are disastrous to begin with,” she said. “We are paid 30 percent less than those who work in mental health settings get paid.”

Lewis predicted that some agencies will be forced to close. Hubbell said some have.

Health Services Director Gloria Symons said MICA manages a dental care program for low-income residents in Story County. She said cuts and changes in reimbursement levels to the program has made it a challenge “keeping the doors open.”

“We are having to raise other funds to serve clients,” she said. “We are serving some who have had no dental care. Some are in their 40s or 50s, and they have had no dental care for years.”

Symons said at one time MICA was being reimbursed $700 for an individual’s care. The MCOs have since reduced that to $400 or $300 per person. Symons said approximately 2,000 persons were served by MICA annually.

Raise for MCOs

The managed care companies have been in the news recently, as state officials recently authorized a 7.5 percent raise to Amerigroup and United Health Care.

The agreement will keep United Health Care and Amerigroup in Iowa, but it will mean state leaders must come up with

about $103 million more than last fiscal year, according to the Des Moines Register. The new agreements cover the current fiscal year, which began July 1. The increase in state spending is more than double the 3.3 percent increase the state agreed to for last fiscal year.

Overall, the new contracts will give the two companies raises of 8.4 percent in state and federal money, totaling $344 million.

The companies have complained about losing hundreds of millions of dollars in Iowa due to reimbursement rates they said were set far below their costs when the shift to private management began in 2016. AmeriHealth Caritas, bailed out of the project last fall after failing to get the contract terms it sought from Iowa officials.

Hubbell said Iowans are becoming dissatisfied with Medicaid management by the two MCOs.

“Approximately 650,000 Iowans are on Medicaid,” Hubbell said. “They have relatives, friends and others who are experiencing these issues … we have 40,000 Iowans who have had benefits reduced … 14 mental health providers who have been driven out of business. The access to health care is clearly declining in our state.”


Contact Mike Donahey at 641-753-6611 or

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