Branstad to Push Ahead on Medicaid Privatization


Iowa is moving ahead with its plan to privatize management of the state’s Medicaid system despite a ruling late last week that one of the contractors on the project be removed. CivSource has been following this story since Iowa made the surprising move of removing Magellan Health from the Medicaid program it had managed for decades, in order to give over management to four companies.

Amerigroup Iowa, AmeriHealth Caritas Iowa, UnitedHealthcare Plan of the River Valley, and WellCare of Iowa were all given awards to manage the Medicaid system. However, details began to emerge about the closeness of the relationship between WellCare employees and state officials tasked with the contract process.

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.

According to a Des Moines Register 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. Not surprisingly, a lawsuit was quickly filed by other vendors who didn’t win.

On November 25, an administrative law judge in Iowa ruled that WellCare be removed from the contract. In her ruling, Judge Christie Scase said that the improper communication between Iowa officials and WellCare employees provided and “independent basis” for disqualification.

Despite the ruling, Governor Branstad released a statement saying he was confident that Iowa would move forward with its privatization plan, which is slated to begin on January 1. The state has a few options: it can go ahead with the other three vendors, go to civil court or ask for federal officials to approve the privatization plan anyway. Branstad’s office provided no details on how it plans to move forward.

WellCare has faced a number of legal skirmishes in recent years. Last year, three former WellCare executives went to prison for fraud in a separate case. That information was also omitted from its “integrity agreement” with the state in which it was supposed to disclose legal issues.