In Iowa, financial pain follows Trump-style Medicaid reforms

By David Steen Martin
STAT, January 24, 2017

When President Donald Trump tapped policy consultant Seema Verma to run Medicaid and Medicare in his administration, he called her part of a health care “dream team.”

But the health policy changes she helped design in Iowa have felt more like a nightmare to providers serving poor and disabled residents across the state.

Verma has helped several states revamp Medicaid, including Kentucky and Indiana. Here in Iowa, she worked on an aggressive effort to privatize the program, which provides health care to about 600,000 adults and children.

Complaints poured in when the new program went live on April 1, 2016, shifting all Medicaid recipients at once to managed care.

Nearly a year later, the complaints are still coming: Hospitals, nursing homes, and clinics that provide care to Medicaid patients say they’ve lost hundreds of thousands of dollars in expected reimbursements — and have had to spend untold hours chasing down payments.

The three for-profit managed care organizations running the program aren’t happy either, saying they are hemorrhaging money and accusing the state of vastly underfunding Iowa’s $4.2 billion Medicaid program.

John Bigelow Jr., executive director at the Southwest Iowa Mental Health Center, said the facility was short $313,000 at last count for psychiatric care, outpatient therapy, and other services, in part because the managed care organizations have not reimbursed the center at the same rate the state did.

“We’re doing the same care. We’re just not getting paid for it like we were,” Bigelow said.

When Democrats surveyed 423 Iowa Medicaid providers over the summer, 61 percent said privatization had reduced the quality of services they could provide. Some 90 percent said administrative costs had increased.

“It’s created quite an administrative and financial burden on our hospitals and other providers,” said Scott McIntyre, vice president of communications at the Iowa Hospital Association.

In Washington, meanwhile, Congressman Dave Loebsack, a Democrat, has asked the federal Centers for Medicare and Medicaid to rescind the federal waiver allowing managed care companies to run Iowa’s Medicaid.

But that’s unlikely to happen under the new administration.

If confirmed, Verma is expected to give states even more flexibility to design new Medicaid programs — including more privatization.

Verma, who is awaiting a confirmation hearing for the top job at the Centers for Medicare and Medicaid Services, did not return requests for comment.

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Seema Verma is a conservative ideologue who wishes to convert government health care programs into privatized, consumer-directed models. She has represented some states in negotiating with CMS for waivers to convert their Medicaid programs.

She has been frustrated by the limitations of the waivers, believing that CMS could provide more flexibility with their policies, which would enable her to advance further her ideological preferences. But Iowa serves as an example of what perversions can be accomplished under the current waiver system. Nobody is happy with the changes in Iowa, except Seema Verma.

President Trump has selected her to head CMS and thus be in charge of the waiver process. Her boss will be Tom Price, as head of HHS, who worships the same inhumane ideology. They have a Congress that will be supportive of their efforts to require that these low-income individuals have more “skin in the game” (Verma’s words).

Some are hoping for the Trump surprise of calling for a single payer system. His selections of Verma and Price should set all such expectations aside. Medicaid block grants are on their way, and they will be terribly disruptive of what care Medicaid beneficiaries are receiving!

Some states are trying, but they will be further handicapped by the reductions in the federal transfers made possible by changing to block grants.

We desperately need a well designed single payer system – an improved Medicare for all. We will not get that until we, the people, join together in citizen action to demand health care justice for all.