Iowa Medicaid Privatization Goes Ahead Despite Concerns


In August, CivSource first reported on a surprising move by Iowa lawmakers to choose a group of contractors for its Medicaid privatization project that didn’t include Magellan Health, which had been managing the system for decades. Almost immediately after the contract awards were announced, vendors who weren’t chosen contested the result.

Since then, the Des Moines Register and others have been investigating the bid process. That investigation showed that one of the winners – WellCare – “asked two former state lawmakers for assistance in determining who was on the committee that would be evaluating the bids and how it might influence their decisions,” according to a recent piece. That evidence has also been presented in court.

WellCare recently hired former Iowa House Speaker Christopher Rants as a lobbyist and also has former Representative Renee Schulte on board as a paid consultant. This is what is known as government and regulatory affairs capture.

According to the investigation, multiple emails went between the former government officials and current ones about who was on the contract award committee. The piece also notes that Schulte was a consultant to the state Department of Human Services and took the job at WellCare just days after Governor Branstad announced the privatization plan.

The Governor’s office says that he is confident that the case will be found in favor of the contract winners – the current optics of the situation notwithstanding. The four awardees – Amerigroup Iowa, AmeriHealth Caritas Iowa, UnitedHealthcare Plan of the River Valley, and WellCare of Iowa are moving forward with informational meetings and packets to Medicaid recipients about the changes to the program.

The planned start date to privatize Medicaid services for 560,000 Iowans is January 1, 2016.

Democrats in the statehouse made a motion to delay the timeline to July 1 citing the lawsuit other reservations, but that motion failed along party lines. Local health care providers have also asked the state to slow down implementation, which will impact one in six Iowans.

The privatization comes alongside other rule changes including new reimbursements for telemedicine. As CivSource reported last week, New York also passed a similar rule change which will expand the availability of telemedicine for those on Medicaid as well as private health plans.