215,000 Iowans left with 1 Medicaid choice after provider says it can't take more patients

One of the two remaining companies that manage Iowa’s Medicaid program says it can’t take any of AmeriHealth Caritas' 215,000 clients, leaving those recipients with only one option for their care.

Critics say that may jeopardize some patients' care if their doctors are not covered by the one Medicaid provider left to them.

Amerigroup has informed the Iowa Department of Human Services “they do not currently have capacity to take any new members,” according to a prepared release from DHS that was obtained by the Des Moines Register.

Amerigroup will continue to provide service for their 186,000 Iowa Medicaid members, the release said.

The announcement comes three weeks after AmeriHealth announced Oct. 31 that it had opted to cancel its contract with the state because it was losing too much money. AmeriHealth is scheduled to end its work in Iowa by Dec. 1.

Tuesday’s announcement means the majority of Iowa’s 600,000 recipients must choose UnitedHealthcare to manage their care.

That runs counter to federal rules that require states that contract out their Medicaid management to offer recipients more than one option.

Human Services already received temporary permission to suspend that provision from the Centers for Medicare and Medicaid Services, commonly referenced as CMS.

It is unclear when the state was informed of Amerigroup’s decision not to serve AmeriHealth customers or when the state sought a federal suspension of the rules.

Sen. Pam Jochum, D-Dubuque, who has an adult daughter with disabilities who was recently approved to join Amerigroup Dec. 1, called the state’s lack of public communication about the matter “irresponsible.”

The lack of choice means some Medicaid recipients may discover their doctors don’t have contracts with UnitedHealthcare and may be forced to find new medical providers, she said.

She fears that Medicaid services may not be available in some areas because of the lack of options.

“This wasn’t something that just happened,” Jochum said. “DHS has had to know about this for some time.”

Matt Highland, a spokesman for Human Services, said Tuesday afternoon he was unable to immediately respond to questions, including about the date his department sought the temporary suspension of the Medication option rule from federal officials.

CMS did not respond Tuesday to inquiries and a records request pertaining to Iowa's temporary suspension.

It was also unclear when Iowa Medicaid recipients will receive official notification from Human Services that they won't be able to choose Amerigroup.

The press release sent by DHS Policy Advisor Merea Bentrott was widely circulated Tuesday morning among lawmakers, legislative staff and medical providers but — by late in the day — had not been posted to the agency's online news releases.

"The Department is continuing to work with the (Medicaid management companies) on this transition. We will notify members, providers and stakeholders as soon as we have finalized information," Highland said in a statement.

Iowa is in the process of seeking bids to hire another Medicaid management company. DHS officials on Oct. 31 said they hoped to hire another company by July 1 of next year, but later changed that date to July of 2019.

“In the future, members again will have a choice in MCOs and will be notified when that choice is available,” Human Services said in its prepared release.

Iowa hired three companies to take over Medicaid management on April 1, 2016, in a plan former Gov. Terry Branstad said would save the state money.

Iowa previously managed the $4.3 billion program.

The companies have for months said they have lost hundreds of millions of dollars in their work with Iowa. Iowa DHS last month announced it had increased payments to the remaining management companies by 3.3 percent.

The new rates will cost an estimated $182.8 million more each year than the initial rates set when the program began in April 2016. Of that amount, $147 million will be paid by the federal government.

Complaints have persisted about how the program was run following the management changes.

That includes the July death of Orange City quadriplegic Todd Mouw and another case that left 25-year-old Des Moines quadriplegic Louis Facenda Jr. in an unchanged diaper for up to 12-hours at a time for several weeks over the summer.

Disability Rights Iowa in June filed a lawsuit against the state alleging the state’s shift to a privately run Medicaid program is depriving thousands of Iowans with disabilities the legal right to live safely outside of care facilities.

Jane Hudson, the group’s director, called Tuesday’s news “really disappointing.”

Federal rules requiring Medicaid provider options are in place so recipients can maintain access to health care, Hudson said.

“That’s very problematic that there’s no choice anymore,” Hudson said Tuesday. “That’s just really disappointing. The privatization of Medicaid services appears to be falling apart.”