Iowa looks to modernize Medicaid payments, eligibility checks

Electronic payments and more stringent authorization requirements for expensive tests paid by Medicaid will save Iowa’s Department of Human Services $11 million, the department’s director said yesterday.

A recent lawsuit filed by the state found that authors of a drug database had artificially inflated the average wholesale price of pharmaceuticals. Iowa’s Medicaid program is expected to save $2.2 million in funds this fiscal year, with an additional $3.4 million next year. But according to DHS Director Charles Krogmeier, savings from the lawsuit are only part of new changes in department policy and business processes.

“We know that we need to make cuts to address shortages in state revenue and to meet our statutory obligations to the citizens of Iowa. Our goal with these changes is to cut spending in ways that will not reduce service to our customers,” Krogmeier said in a statement.

Technology will have a big role in the upcoming Medicaid changes. Beginning in November, electronic payment cards will be used to pay recipients of Iowa’s Family Investment Program (FIP), a move that is expected to save the state over $230,000 in postage and administrative costs alone. And starting next spring, Medicaid is eliminating payments to physicians and others by check, saving an estimated $182,000 through next fiscal year. Finally, Medicaid claims will soon be screened by a new tool, designed to check for coding errors that can result in over payments. Department officials say the new tool could prevent nearly $3.5 million in overpayments through fiscal year 2011.

Krogmeier also said the department is going to implement more telecommuting policies for its overburdened case managers who average caseloads of more than 500. Next spring, DHS workers will be able to perform more application interviews by phone rather than in-person. But face-to-face interview will still be required if DHS workers believe they’re needed to verify program eligibility or if clients request one, Krogmeier indicated.

Last, but not least, a planned automated system to speed the process of obtaining information on client income, resources and other eligibility documents will also help workloads, Krogmeier said.

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