Editor’s note: An earlier version of this story had a pull quote that was incorrectly attributed.
Iowa’s shift to private management of its Medicaid program continues to spark complaints, especially from agencies that provide services to the 560,000 Iowans covered by the public insurance.
Many agency leaders say they’re going into debt because many of their bills continue to be rejected for trivial or unclear reasons, more than three months after private firms took control of Iowa’s Medicaid program.
“We’re getting denials that we have no idea what they mean,” said Tami Lichtenberg, executive director of Iowa River Hospice in Marshalltown.
Lichtenberg said her 55-employee agency is nearly $50,000 short because of the problem. She has taken out a line of credit to keep her business afloat, but she can’t keep doing that forever.
“We will continue to do the work in the community, because it’s the right thing to do, but it’s getting painful,” she said.
Lichtenberg spoke last week at a meeting in Marshalltown, which was called by Democratic lawmakers who are critical of the Medicaid privatization.
The meeting attracted two dozen people, many of whom run social services agencies.
At one point in the Marshalltown hearing, Rep. Mark Smith asked the audience: “Anyone have an OK experience with managed care?”
The question drew chortles from the audience.
Starla Elsberry of Marshalltown, a board member of the advocacy group Disability Rights Iowa, told Smith and Sen. Steve Sodders that she has heard numerous reports about unpaid bills for services to Medicaid participants.
“It’s getting to a crisis situation where some smaller agencies are probably going to have to close their doors,” she said.
Smith, who is the highest-ranking Democrat in the Iowa House, said afterward that he was startled to still be hearing about service agencies going unpaid by the private Medicaid managers.
“I thought a lot of this would be ironed out by now,” he said. He agrees with critics that small service agencies could soon be shuttered if the payment system is not straightened out.
Smith and other Democrats opposed last year’s decision by Gov. Terry Branstad to turn over the giant health insurance program to private managers. Branstad, a Republican, contends that the shift will provide more flexible, efficient care. His Department of Human Services and the three Medicaid management firms say they are working to help social service agencies understand how to file proper bills under the new system.
Human Services Director Charles Palmer said in an interview last week that he remains confident the billing issues are being worked out as the Medicaid management companies and service providers get used to each others’ needs and practices.
“I’m very confident we’ll get through it. I think it’s a painful time right now while we’re going through it,” Palmer said. He spoke during a break in a budget meeting at which several service provider organizations mentioned the billing problems.
Palmer said he takes seriously the concerns that some small service agencies will close their doors because Medicaid bills aren’t being paid. He said he has urged industry associations to let his administrators know if an agency is in such a bind.
“We will immediately try to deal with it. … If they believe that it is an immediate crisis issue, then I want to know about it,” he said. Palmer said his agency has intervened with the managed care companies in some cases to help unsnarl billing issues.
DHS: 4.6 million ‘clean claims’
Palmer’s department has been touting the number of claims paid under the new system. His spokeswoman told The Des Moines Register last week that the managed care companies had processed 4.6 million “clean claims,” with an average processing time of 8.5 days. But she said she could not yet estimate how many claims had been rejected for failing to be “clean.”
Palmer said Wednesday that such data would be available soon. He said legislators would receive the information before a July 26 Statehouse hearing on the issues.
State Sen. Liz Mathis, a Robins Democrat who leads the Senate’s Human Resources Committee, will lead that hearing. Mathis said in an interview that she worries that service providers, especially small ones, can’t go on much longer without receiving regular payments for their services to poor or disabled Iowans. Several have told her they’ve borrowed tens of thousands of dollars to meet payroll, but they can’t keep doing that.
“This is where the rubber meets the road, really,” Mathis said.
Even Iowans who have private coverage will be harmed if a service agency, such as a nursing home, closes its doors, she said. “I think people are starting to wake up to the fact that this affects everyone, not just those on Medicaid.”
Mathis pointed to the owner of three small care facilities in her area who is struggling. Pat Giorgio, owner of Evergreen Estates, said in an interview that she had to take out $100,000 in loans to keep her 117-resident operation open.
“That’s long gone,” she said of the money.
Like many other service providers, Giorgio said employees of the managed care companies have been polite and have tried to help. But she said they clearly weren’t ready for the state to abruptly shift its entire Medicaid system to managed care April 1.
“It should have been tested,” she said of the system.
Issues burn out agency chief
Benjamin Wright, executive director of an Ottumwa agency that helps people with intellectual disabilities or mental illnesses, said the problems he feared have come to pass since Iowa hired national firms to run its Medicaid program.
“Common sense just screams: ‘What are you doing? You’re taking money from the poor and giving it to for-profit companies,’” he said.
Wright’s agency, Tenco, serves about 300 clients and has about 250 employees. He said it has had to borrow money to meet payroll in recent weeks. That’s mainly because the new managed care companies have been slow to pay bills and often have been paying less than the state used to pay, he said.
For example, Wright said, the managed care company Amerihealth has only been paying $130 per day for Tenco to supervise a man with severe mental illness. The state used to pay $320 per day for the same man, whom a judge ordered to have one-on-one supervision around the clock, Wright said.
Wright said his nonprofit agency continues to work with the client, even though it is losing money on him.
“If this were strictly a business decision, he’d be long gone,” he said.
But, Wright said, Tenco could not afford to take on any more such complicated clients under Medicaid managed care. Other agencies are in the same predicament, he said. That would worsen a critical bottleneck in Iowa hospitals, whose psychiatric unit leaders already are complaining that they can’t find placements for people with mental illness who no longer need hospitalization. Many such patients are spending extra weeks or even months in hospitals, often costing more than $1,000 per day.
Wright is quitting his job in Ottumwa this month, citing frustration with the Medicaid situation. He’s taken a similar position in Minnesota, “where people are a little more sane when it comes to Medicaid.”
Human Services spokeswoman Amy Lorentzen McCoy said some such agencies are receiving averaged payments, which are higher for some clients but lower for others. But Wright said the averaging doesn’t explain away the huge difference his agency saw for the difficult client in question.
Improvements come too
Leaders of Visiting Nurse Services, based in Des Moines, said they’ve seen improvements since the new private management system’s rocky start.
Lesley Christensen, the agency’s manager of maternal and child health outreach, helps lead an informal group of local service providers who have been meeting twice a month with managed care representatives to iron out problems. Christensen said the representatives have been open to criticisms and appear to make good-faith efforts to fix glitches. Still, she said, she continues to hear complaints about slow reimbursements, which are especially hard for small agencies to weather.
Visiting Nurse Services is a large agency, serving about 65,000 Iowans. It provides a range of services, including home visits to new families, hospice care and transportation to medical and dental appointments. At first, the agency’s staff ran into many roadblocks, including requirements for pre-authorization before in-home services could be provided. But those have eased as the two sides learned more about each other, she said.
Some of the thorniest problems continue to involve arranging transportation, especially for clients who don’t speak English. But that was an issue under state management as well, Christensen said.
Jim Knoepfler, a vice president for Visiting Nurse Services, added that Medicaid recipients in the Des Moines area benefit from the decision of most service providers to sign contracts with all three Medicaid management companies. In the months leading up to the April 1 launch, many critics predicted that providers wouldn’t do that, meaning Medicaid recipients would have to choose networks missing some of their longtime service providers.
“That was my biggest fear going into this,” Knoepfler said.
Companies: We’re trying to help
Representatives of the three management companies have repeatedly said they are offering training and assistance for service providers to understand the new billing systems.
Joshua Brett, a spokesman for one of them, AmeriHealth Caritas, sent an email to the Register reiterating this point.
“AmeriHealth Caritas Iowa is committed to being a trusted partner in Iowa for our members and our providers. We are committed to working with providers to resolve matters of concern as quickly and appropriately as possible,” he wrote. Brett encouraged providers to call the company’s central line to air any concerns.
Denise Malecki, a spokeswoman for Amerigroup, also released a statement.
“Amerigroup is dedicated to paying all of our providers accurately and timely,” she wrote. “We are also committed to quick and fair resolutions regarding payment issues and claim denials. We encourage any provider who has questions regarding payments and claim denials to contact us directly.”
Malecki also noted that the managed care companies are required to file reports with the state about how quickly they are processing and paying claims. She said Amerigroup expects the state to release those reports soon.