DES MOINES, Iowa (AP) — The loss of a second major health care insurer in the Iowa Medicaid program raised serious concern Monday about the stability of the program that serves about 600,000 poor and disabled people.
UnitedHealthcare announced Friday it would leave Iowa's $5 billion program in the coming months citing in a statement that "persistent funding and program design challenges make it impossible for us to provide the quality care and service we believe people deserve."
It is the second health care insurance provider to leave the Iowa program over money since it was handed over to private companies by former Gov. Terry Branstad in 2016.
AmeriHealth Caritas pulled out of the program in October 2017 owing more than $14 million in unpaid claims to hospitals and private and nonprofit service providers, some of which has since been repaid.
Gov. Kim Reynolds who took office in May 2017 has insisted on continuing the privatization amid complaints doctors and other medical professionals are not getting paid, patients have seen services cut and the state hasn't realized the millions of dollars in savings promised through privatization.
She said performance requirements were added last year to contracts to ensure companies were improving care in order to get additional funding.
"Unfortunately, UnitedHealthcare continued to make additional demands that I found to be unacceptable, including a provision that would remove pay for performance measures that would hold them accountable," she said.
Iowa DHS Director Jerry Foxhoven said the more than 400,000 people covered by UnitedHealthcare will be distributed among the remaining two insurers.
"We're totally confident that they have demonstrated they have network adequacy and will be continuing to improve that before July 1 before United is gone," he said.
Amerigroup, a subsidiary of Anthem Inc. remains under contract with Iowa and Iowa Total Care, a division of Centene Corp. entered a contract with Iowa just last May to replace AmeriHealth. It begins serving Iowans on July 1 and is currently signing up doctors, hospitals and other health care providers.
Rep. Lisa Heddens, a Democrat who serves on the human services budget subcommittee, said it's time for Reynolds and the state to admit privatization is failing.
"Hundreds of thousands of Iowans will have their health care disrupted again and our most vulnerable could be faced with life or death situations," she said.
House Democrats filed an amendment that would move Iowans who need long term assistance back to state management and another to end Medicaid privatization at the end of the fiscal year to every bill eligible for debate on Monday and Tuesday. With Republicans in the majority they are unlikely to pass.
Republican House Speaker Linda Upmeyer said Reynolds was right to push for oversight and accountability.
"I want to thank Gov. Reynolds for standing strong in her negotiations," she said. "We will monitor this situation carefully and help our constituents navigate the system during this transition."
Foxhoven insists a second departure of an insurer isn't a sign of a troubled program.
"The fact that the governor's willing to say you are not the right company for this state if you can't meet performance measures and don't want to be held to those is a sign of the health of the managed care system in this state," he said.
State Treasurer Michael Fitzgerald, a Democrat, said he's concerned the remaining companies have increased leverage in contract negotiations.
"They have us over a barrel. They can say you've got to increase payments to us because no company will do it. As a matter of fact we're going to walk out the door next if you don't pay us more," he said.
Auditor Rob Sand, also a Democrat said the contract with UnitedHealthcare requires the company to help transition clients to another provider before it leaves.
He said his office is investigating Medicaid issues.
"We're looking at multiple matters. What we can share about them is limited by the law and limited by discretion," he said.
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