Iowa Picks Four on Medicaid Modernization


In a surprise move, the Iowa Department of Human Services is going with four new vendors on its Medicaid modernization initiative. Magellan Health, which has been managing Medicaid for the state for decades was not included in the new award.

Amerigroup Iowa, AmeriHealth Caritas Iowa, UnitedHealthcare Plan of the River Valley, and WellCare of Iowa were all chosen to modernize the $4.2 billion system.

The state first started looking for new relationships in February of this year. Iowa received 11 bids from potential vendors, and plans to move toward a risk-based managed care approach for Medicaid, which serves about 560,000 Iowans.

The modernization plan includes improvements to coordinated care, a move to outcomes based healthcare, and an effort to craft a more sustainable, and predictable long-term budget for the program.

The cost of delivering Medicaid has grown 73 percent since 2003 at more than $4.2 billion in the last fiscal year, including $1.39 billion in state general fund taxpayer dollars, according to a statement from Iowa DHS. The Iowa High Quality Health Care Initiative allows the state to hire modern health plans to coordinate care and manage spending. Moving to a managed care approach and capitated rate allows the state to achieve the goal of a more stable budget.

This new approach for the Medicaid program will be called the IA Health Link. With the announcement of awards, DHS will launch a targeted communications campaign with Medicaid members, stakeholder organizations, providers, and other interested audiences about upcoming enrollment and program activities.

The new contractors will take over on January 1, provided DHS makes it through the process without facing claims from the companies that were not chosen. Some, including Aetna are said to be considering their options.