DES MOINES — Some seriously disabled Iowans covered by privately run Medicaid could be exempted from the controversial managed care program and be treated on a fee basis instead, the director of the state Department of Human Services told an advisory panel Wednesday.

That possibility emerged, said Human Services Director Jerry Foxhoven, during still unresolved contract talks with the private insurance companies hired to manage the health care program for thousands of the state’s most vulnerable residents.

“We are trying to look at all of the options of how do we make it work, and so pretty well everything is on the table,” he told the Iowa Council on Human Services.

Back in June, six Iowans filed a federal lawsuit asserting that thousands of disabled residents were being denied the right under the privatized program to live safely outside of care facilities — such as in their own homes, where some of the plaintiffs said the insurers sharply cut their health benefits.

Besides disabled Iowans, the Medicaid program covers thousands of poor and elderly.

Those unresolved contract negotiations with the insurers hired to run the program — coupled with health care industry uncertainty — cast a shadow over the panel’s effort to chart a fiscal 2019 budget for Human Services effective July 1.

Foxhoven asked members of the Iowa Council on Human Services to recommend to Gov. Kim Reynolds a $1.808 billion general fund appropriation that would mean “status quo” spending for the agency while boosting the state’s share of Medicaid funding by $112 million.

Council members who voted 4-2 to approve the 6.9 percent increase, but many said it was unrealistic because it “zeroed out” the line item for Medicaid capitation rates still being negotiated with the three companies — which say they are losing millions of dollars under the current rates.

Council Chairman Mark Anderson of Waverly expressed “a lot of anxiety” over passing a budget plan that includes nothing for the capitation payments — fees the companies get each month to deliver care — for this or fiscal 2019.

“The budget itself doesn’t pencil out,” Anderson said. “We know there will be some changes, so it’s already a budget that can’t work. That’s the concern.”

Kimberly Spading, a council member from Coralville who voted against the budget recommendation, praised agency efforts to deal with a difficult fiscal situation, but said the plan was “unreasonable” and would put at risk vulnerable Iowans most in need of government assistance.

“It’s just really unattainable. We know that we’re going to see increases for things and to not fund them is going to be inadvertently hurting somebody,” said Spading. “I think there are other ways maybe to move things around, but not by making the assumptions that we’re going to have zero increases in some of those programs. It’s not realistic and not fair to providers in some cases and not fair to patients and the citizens of Iowa that need it the most.”

Foxhoven admitted it is taking longer to negotiate Medicaid rates than he had anticipated. He told council members the state has reached tentative agreement with one company, and he plans to meet with the other two Thursday for more talks.

The state has contracted with Amerigroup, AmeriHealth Caritas Iowa and UnitedHealthcare Plan of Iowa to manage care for 767,000 Iowans since April 2016.

Foxhoven said that once the 2018 payment rates for the insurers have been set, talks could start again in about two months aimed at finalizing the 2019 contract with the companies. That way, the Legislature can fund programs through June 2019.

“We are not going to be in a position, if I have anything to do with it, of being approaching July and not have a contract already for 2019. We want that done,” he told reporters during a meeting break Wednesday.

Human Services officials also outlined cost-containment steps that might be considered if more state spending cuts are ordered — including limiting who might be eligible for optional services, possibly reducing or capping the amount of services or eliminating some of them altogether.

The council voted to send Reynolds a letter expressing concern about the department’s budget and programs going forward, although Anderson said “I’m confident that the governor is well aware that there are issues.”

The overall fiscal 2019 Human Services budget includes an additional $4.683 billion that would come from federal matching money or other non-general fund sources. The recommendation now goes to the governor for inclusion in the budget plan she submits to the General Assembly during the next regular legislative session.

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Cost of Iowa’s private Medicaid sparks anxiety – Sioux City Journal