Medicaid Privatization Timeline

September 18, 2019 Senate Staff Policy Paper 0

Iowa’s Medicaid Privatization Timeline – Sept 2019Download PDF
DATEWHAT HAPPENED
January 2015Branstad tells Legislature he has decided to unilaterally privatize Medicaid.
February 16, 2015The Iowa Department of Human Services (DHS) releases RFP to procure private Managed Care Organizations (MCOs).
August 17, 2015MCOs awarded contracts: AmeriHealth Caritas, United, Amerigroup and WellCare.
November 2015Senators Mathis, Ragan and Jochum travel to DC to talk with White House officials and the Centers for Medicare & Medicaid Services (CMS) about delaying or rejecting Iowa’s application to move to managed care.
December 2015CMS makes a site visit to Iowa.
December 15, 2015CMS delays Iowa privatization implementation to March 1, 2016.
December 18, 2015WellCare contract is terminated for failure to disclose wrongdoing in other states.
December 31, 2015Wellmark hawk-i contract ends. Because of the delayed implementation, hawk-i members have only one option: United Healthcare.
January 1, 2016Original date for implementation before CMS delay.
February 11, 2016Senate votes to terminate Medicaid privatization contracts 29-19 (with Rs Chapman, D. Johnson and Shipley voting “yes,” and a note in the journal from Zaun, who was absent, saying he would have voted “yes”).
March 1, 2016Privatization delayed again by CMS until April 1.
April 1, 2016Privatization begins.
Fall 2016Governor Branstad increases rates for MCOs due to rising pharmaceutical costs and other emerging trends. At the time, it was estimated to cost $33.2 million from state funds and $94.5 million from federal funds, for a total increase to the MCOs of $127.7 million. Emerging Trends and Risk Corridor Fiscal Information
February 2017MCOs report to the Legislature’s Health and Human Services Budget Subcommittee that they are losing a combined total of $450 million.
March 24, 2017An FOIA request from the Des Moines Register reveals that the State had signed contract amendments with the MCOs giving them an additional $235 million in a “risk corridor” arrangement. Since this was mostly due to Health and Wellness Plan members, the state portion was estimated at $10 million and the federal portion at $225 million because of the enhanced match rate for the Health and Wellness Plan (Medicaid expansion). Risk corridor plan was later denied by CMS.
May 31, 2017Chuck Palmer announces June 16 retirement.
June 16, 2017Jerry Foxhoven starts as new DHS director.
August 23, 2017Mikki Stier reassigned from Medicaid Director to Deputy Director of DHS.
October 1, 2017AmeriHealth gives 60 day notice to DHS that they will leave Iowa.
October 31, 2017DHS announces AmeriHealth will leave Iowa in 30 days.
October 31, 2017DHS announces the MCOs will receive a 3.3% increase ($60 million in state funds; $80 million federal) in capitation rates for fiscal year 2018 (after negotiations stretched into FY18). The emerging trends payments will actually total almost $78 million in state funds as opposed to the Fall 2016 estimate of $33.2 million. The risk corridor arrangement for Health and Wellness Plan members was not approved by CMS. The emerging trends increases will be paid retroactively to the beginning of the program, April 1, 2016.
October 31, 2017DHS announces 215,000 members will be auto enrolled to Amerigroup and United.
November 7, 2017DHS announces that all 215,000 members will instead be enrolled with United but members can choose to change to Amerigroup.
November 7, 2017DHS announces that new RFP for additional MCOs will be delayed from July 2018 to July 2019.
November 21, 2017Amerigroup will not accept any new members.
November 22, 2017DHS announces CMS has granted temporary permission to offer no choice of MCOs.
November 23, 2017DHS clarifies it has only communicated with CMS on the no choice situation.
November 27, 2017DHS announces that 10,000 members that tried to sign on with Amerigroup before November 16 will be covered instead under traditional Medicaid fee for service and all other former AmeriHealth members will be assigned to United.
November 29, 2017Senators Ragan and Mathis ask Governor Reynolds to give all former AmeriHealth members the choice between United and fee for service.
December 1, 201710,121 former AmeriHealth members that chose Amerigroup before November 16, 2017 are in the Medicaid fee for service program.
December 1, 2017Approximately 208,000 former AmeriHealth members getting coverage from United, regardless of their preference.
December 4, 2017New Medicaid Director, Michael Randol, begins work in Iowa. He was formerly the Medicaid Director in Kansas, the only state with a Medicaid disaster worse than Iowa’s.
February 2018Iowa Medicaid ends contract with Milliman, the actuarial firm that determined payment rates to MCOs, and hired a new actuarial firm, Optimas.
April 2018Amerigroup begins accepting more Medicaid members after four months of “no choice.” This allows 10,000 members who temporarily had been in fee for service to be shifted to Amerigroup.
May 2018HHS FY19 budget includes NO money for any capitation rate increases for the MCOs, and negotiations with the MCOs continue even though Director Foxhoven promised resolution before the end of session.
May 2018Iowa Total Care is selected an MCO through RFP (two applicants) to begin service July 1, 2019.
June 2018Iowa Medicaid Enterprise (IME) announces a new $1,000 cap on Dental Wellness Plan services for adult members.
June 2018University of Iowa Dental College announces it will no longer accept Medicaid patients.
June 2018Director Randol explains yet another estimate of the “savings” provided by privatization. The original amount was $232 million per year. That decreased to $47 million per year in Fall 2017. In May 2018, the amount was revised to $140.9 million. There is NO data on how the savings are achieved (through fewer hospitalizations, healthier Iowans, etc.).
July 2018Iowa Total Care (Centene) is selected as Iowa’s third MCO, to begin providing services in July 2019. This creates another round of disruptions for Iowa Medicaid members. Many are concerned that members will not be able to keep their provider; providers won’t sign up with the new company because of previous problems. In addition, Iowa Total Care has had at least $23 million in penalties assessed to them in other states.
August 2018Negotiations with MCOs for FY18 (which began July 1, 2017) are finally complete. The Reynolds Administration agrees to a 7.5% increase for MCOs, which is actually an 8.4 percent overall increase when state and federal funds are added together—more than double the 3.3% increase granted the previous fiscal year. State: $103 million; federal: $241 million; total increase: $344 million.
September 2018DHS announces they will move to calendar-year contracts with MCOs.
December 2018The supplemental appropriation for FY19 Medicaid is $141 million; revised to $150 million in March 2019.
February 2019DHS shares information and timeline on transition and auto reassignments for Iowa Total Care starting service on July 1, 2019.
March 2019With the approaching addition of Iowa Total Care, letters to all Medicaid members reassign their MCOs.
March 2019United Healthcare announces its departure from Iowa Medicaid program.
March 2019A new Medicaid forecast document reveals that DHS is no longer moving to calendar year contracts with MCOs. In addition, DHS has signed contract Amendment #8, giving the MCOs another 0.5% raise in capitation payments from January through June 2018. This raises the FY19 supplemental need by $4 million.
April 2019To cover MCO increases, DHS gets a $150 million FY19 supplemental in the FY20 budget bill for Medicaid.
April 2019DHS enters contract negotiations for FY20.
April 2019DHS develops a transition plan due to United Healthcare’s departure.
June 17, 2019Governor Reynolds asks for Director Foxhoven’s resignation and appoints Gerd Clabaugh to Acting DHS Director. Liz Matney moves to Governor’s office.
June 30, 2019United Healthcare departs Iowa Medicaid Program.
July 1, 2019Iowa Total Care begins serving Iowa Medicaid members.
July 10, 2019FY20 MCO contracts are signed, with MCOs set to receive an 8.6% increase.
September 5, 2019Governor Reynolds hires Kelly Kennedy Garcia from Texas as DHS Director starting on November 1, 2019.
September 10, 2019FY21 DHS budget request shows a $106 million supplemental need for Medicaid for FY20: $67.8 million for MCO increases; $9.1 million for budgeted shortfall; $7.9 million due to less from HCTF; $17.2 million due to decreased pharmacy rebates; and $4.5 million in other changes.
January 3, 2020DHS withholds $44 million from Iowa Total Care for failure to pay claims and resolve issues.