For Iowans to trust the findings of a Medicaid audit, it needs to be conducted by an independent entity.

The election of Gov. Kim Reynolds means privatized Medicaid is here to stay. She has refused to return control of the health insurance program for 600,000 people to the state, and it’s unlikely she will do so in the future. 

That reality should prompt all Iowans, including privatization critics and the governor’s administration, to shift our focus to a common goal: Making sure Iowa’s privatized Medicaid works as intended for patients, providers and taxpayers. That will ultimately require diligent oversight and a commitment by this administration to transparency. 

The most important step right now is obtaining an independent, comprehensive assessment of the impact of privatization. Iowans are understandably confused about what exactly has happened since for-profit companies took over the health insurance program in early 2016.

We have politically driven press releases. We have anecdotes about health providers closing their doors. We have news stories about disabled people losing care and private insurers receiving more and more taxpayer money. We have cost estimates from the Reynolds administration that are all over the board.

Republican State Auditor Mary Moisman recently released an audit claiming Iowa is saving money, but that audit is incomplete, narrow and feels political. 

It did not consider how much the for-profit managed care companies owe in back bills to hospitals, clinics and other service providers. It did not explain how Iowa was achieving the supposed savings. The review period was set to end Nov. 7, which was not the end of the fiscal or calendar year, but was the day after this year’s midterm elections.

Mosiman lost in that election to incoming state auditor Rob Sand, a Democrat. He made Medicaid a central issue in his campaign and has vowed to review it. Yet Iowans may not trust his findings either.

Right or wrong, Iowa’s auditor, who is elected and affiliated with a political party, will inevitably be viewed as having an agenda on privatized Medicaid. And the office is not the best one to comprehensively tackle this issue anyway. 

An analysis should be conducted by the nonpartisan Legislative Services Agency. It is familiar with the complexities of Medicaid and is not headed by an elected official. It has authority under state law to conduct a review if lawmakers request one. 

 An Iowa Code section specifically pertaining to LSA states lawmakers “shall independently and intensively review and oversee the performance of state agencies in the operation of state programs to evaluate the efficiency and effectiveness of the state programs and to consider alternatives which may improve the benefits of such programs or may reduce their costs to the citizens of the state.”

Our state legislators have failed abysmally at fulfilling this responsibility. Now they should direct LSA to conduct a review modeled after what’s known as a Legislative Post Audit (LPA), a performance audit conducted by the auditing arm of the Kansas Legislature. 

Kansas, which privatized Medicaid in 2013, contracted with three private insurers and paid them a per-member-per-month rate to manage care. In other words, essentially exactly what Iowa did three years later. 

By 2017, complaints were piling up, and the federal government was raising concerns. Kansas legislators decided they wanted to know how privatization impacted Medicaid costs, services and beneficiaries’ overall health. Enter the independent auditors.

They worked for a year, collecting about 200 million records related to beneficiary demographics, Medicaid claims costs, service use and health outcomes. They compared information before and after privatization and looked beyond simply costs and savings to taxpayers.

The final report revealed where the state needed to do a better job in gathering data and included important details about public dollars and patients. 

For example, it found state payments to private insurers were hundreds of millions of dollars more than insurers were paying for health care claims. After privatization was implemented, use of nursing home care increased by 16 percent, and there was little evidence managed care’s emphasis on preventive care reduced hospital stays. 

This is exactly the kind of nonpartisan, comprehensive information Iowa needs about this state’s privatization of Medicaid. Without it, we cannot honestly evaluate what is happening or how to move forward. 

 

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