Iowa Medicaid payment shortages are 'catastrophic,' private managers tell state [View all]

The for-profit companies running Iowa’s Medicaid program have been complaining to state administrators that the controversial project is “drastically underfunded” and that the situation has been a “catastrophic experience,” newly released documents show.

One managed care executive wrote that Iowa’s recent offer to give the companies an extra $127.7 million in state and federal money this budget year “is not acceptable.” He added that without major changes, the privately run Medicaid program could be unsustainable. None of the three companies has agreed to accept the size of the increase in money they would receive for covering poor and disabled Iowans.

“We are extremely disappointed in the amended rate offer, as it does not address the significant rate issue identified and documented. … The department’s rate offer is not actuarially sound and is not acceptable to us,” AmeriHealth Caritas Regional Vice President Russell Gianforcaro wrote on Oct. 27 to Department of Human Services Director Charles Palmer.

The companies’ complaints were included in recent memos and emails The Des Moines Register obtained under the state’s open-records law. The three companies, Amerigroup, AmeriHealth Caritas and UnitedHealthcare, told state officials that their reimbursement rates were based on deeply flawed cost estimates provided to them before the project began.

Read more: http://www.desmoinesregister.com/story/news/health/2016/12/21/iowa-medicaid-payment-shortages-catastrophic-private-managers-tell-state/95697880/