Iowa needs answers on Medicaid savings, not a Kansas-style shell game The Legislative Services Agency is nonpartisan and best positioned for complicated task

The Register's editorial | The Des Moines Register

Show Caption Hide Caption Iowa Medicaid Director promises savings but it's unclear how much Mike Randol, Iowa's Medicaid Director, says privatization has meant savings. But its unclear how much Iowa has saved.

Iowa's new Medicaid director is turning out to be as much of a disappointment in this state as he was in Kansas.

Mike Randol again this month failed to adequately explain how his office arrived at a $141 million estimate of annual savings from Iowa's privatization of Medicaid. He was also unable or unwilling to explain to a human services council why that estimate was triple the one his office previously released. Then he scooted out of the conference room, refusing to take questions from reporters.

Information about the financial impact of privatization is important because Gov. Terry Branstad promised $232 million in savings when he handed over Medicaid management to three for-profit companies in 2016. While Iowans have heard many anecdotes about the negative consequences on low-income patients and health providers, we know essentially nothing about how taxpayers have fared.

With Randol showing little interest in transparency, Iowa’s state auditor has agreed to look into the see-sawing estimates of how much Iowa taxpayers may or may not be saving.

State Auditor Mary Mosiman deserves credit for being willing to wade into this mess, yet she is likely not the right person for the job. She is elected. She is a Republican.

She has given no reason to imagine that she would put partisanship ahead of impartial evaluation. But fair or not, Iowans may not trust her findings. Besides, her office may not be equipped to provide what's needed here, which is more than an audit. Iowans deserve a comprehensive program review, which should extend beyond Medicaid spending.

The best government entity for this complicated and time-consuming task is the nonpartisan Legislative Services Agency, which can conduct such a review with approval from legislators. With the Legislature out of session, the Legislative Council has power to authorize the review.

According to Iowa Code 2A.7, lawmakers “shall independently and intensively review and oversee the performance of state agencies in the operation of state programs to evaluate the efficiency and effectiveness of the state programs and to consider alternatives which may improve the benefits of such programs or may reduce their costs to the citizens of the state.”

Iowa lawmakers apparently missed this responsibility specified in Iowa Code. They have done little to ensure oversight of privatized Medicaid.

So these elected officials should direct LSA to conduct an evaluation and provide additional resources to LSA if needed. LSA should then model its review after one conducted by the auditing arm of the Kansas Legislature known as the Legislative Post Audit (LPA).

Kansas privatized Medicaid in 2013, contracting with three managed care organizations (MCOs) and paying them a per-member-per-month rate for administering the health insurance program. Iowa's privatization is modeled after so-called KanCare, which has been such a disaster in our neighboring state that the federal government denied the state’s request to renew the program, and its future is uncertain.

In April 2017, Kansas legislators directed their independent auditors to find out whether KanCare is working. The work took a year and included reviewing nearly 200 million Medicaid records before LPA released its report in April 2018.

The findings are not encouraging. Not for Kansas. And not for Iowa. These findings include:

State payments to MCOs were about $400 million more than what the private insurers paid in claims in 2015 and again in 2016. The for-profit companies collected $800 million more in public money over two years than they spent on health care for Kansans.

State payments to the insurers grew from $2.1 billion in 2013 to $3 billion in 2016. “Our model results showed that the implementation of KanCare did not appear to have helped contain Medicaid claims costs,” according to the report.

After KanCare was implemented, use of nursing home care increased by 16 percent.

There was little to no effect on inpatient care “implying (managed care’s) emphasis on preventative care did not reduce beneficiaries' time in a hospital,” according to the report.

The Kansas auditors struggled to evaluate some aspects of privatized Medicaid due to a lack of information and the failure of the state to adequately oversee the MCOs. For example, auditors said they could not evaluate whether there were enough doctors and other medical providers participating because the data insurance companies submitted to the state “had duplicative, missing and outdated provider information.”

Kansas has no system to track whether medical care claims are accurate. Oversight of this is important because the reimbursements the state pays insurers are based in part on how much they’ve paid in claims. One insurer wrongly included interest paid to providers, which “may have inappropriately inflated" the payments it received from the state, according to the report.

Every Iowa policymaker, including Gov. Kim Reynolds, should read the Kansas report. It offers an unbiased, comprehensive look at problems with privatization in Kansas that Iowa will likely experience if this state does not change course.

More: Returning Medicaid to state control does not take 'years'

And the report may help explain why Iowa's current Medicaid director, who helped create the mess in Kansas, is unwilling to provide detailed information and answer questions about what is going on here.