CMS Makes Iowa Wait 60 Days to Start Medicaid Managed Care

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A letter to the Branstad administration said while approval of waivers to allow managed care could be anticipated, there were still too many unresolved issues to allow a transition on January 1, 2016.

After a year of political wrangling over who will deliver healthcare to Iowa’s poor, federal officials told Governor Terry Branstad he’ll get his way, but he’ll have to wait a little longer.

CMS delayed the start of Medicaid managed care in Iowa until March 1, 2016, which will allow more time for the transition to 4 contractors selected earlier this year to deliver care to 560,000 clients. The federal agency outlined its position in a letter to the Branstad administration, which was posted online by the Des Moines Register.

The letter to Medicaid Director Mikki Stier read in part, “CMS expects that we will ultimately be able to approve Iowa’s managed care waivers. However, we do not believe that Iowa is ready to make this transition on January 1.”


The letter further states that to avoid disruptions in care, the transition should be delayed 60 days to address several items relating to network adequacy, items relating to long-term services and supports, and some issues relating to persons with intellectual disabilities.

The letter also states that all managed care networks had small behavioral health networks, with insufficient rehabilitation and community health infrastructure. This is an area where Iowa had recently made progress.

On the data CMS decided on the delay beneficiaries had just 4 days to make decisions on who would be their provider, even though many still lacked information. CMS’ letter report on its encounters with Medicaid clients at “listening sessions,” where clients told of being unable to get through to call centers, which had a 49% abandonment rate and “10,000 calls dropped in the first 9 days of December.”

The letter said Iowa still did not have a “fully functioning” ombudsman for long-term services and supports, which is a person who advocates for patients with severe, ongoing needs. In many states, these patients have had the most difficult transitions in the move to Medicaid managed care, as there are often lost connections to longtime providers.

Both Branstad and state Democrats who have opposed privatization declared victory yesterday, but the delay means Iowa will have to find a way to replace the anticipated budget savings that will be lost. Branstad had said the change would save $51 million in the first 6 months of 2016.