From Representative Dave Heaton

Written by Theresa Rose on March 13, 2018


March 12, 2018

TITLE:  Smoothing out the Bumps in Managed Care


The privatization of Medicaid and the problems that have developed since its implementation have been one of the main points of concern of this Legislature this year.  We all have received countless emails and phone calls and also comments at our community forums from those who feel that the delivery of services and the rates paid for those services are inadequate.

The Legislature recognized that there have been some bumps in the system.  The governor in her State of the State address recognized some of the difficulties and pledged to work at improving our Medicaid Managed System.  The Legislature felt that it also needed an opportunity to initiate some proposals that would attempt to fix some of the shortcomings of the managed care design and find a “vehicle” to get our suggestions to the governor’s desk.

Last Thursday we added an amendment to the DHS Medicaid Efficiency Bill.  There have been billing concerns, prior authorization concerns, and credentialing concerns. As a Legislature we thought this bill is an opportunity to address some of these concerns and encourage our MC plan to operate smoother.  These and others were addressed in the amendment.

ISSUE:  We have heard time and time again that providers had not been paid within a reasonable time frame.  Some providers have been carrying accounts receivable on their books for up to 18 months.  We have heard of MCO’s denying claims and not explaining why it was denied.  Providers were left guessing why.

  • The amendment requires MCO’s to pay providers within the time lines specified in their contract and to provide reasons for such denials of claims consistent with National Industry Best Practice guideline. The amendment also requires DHS to contract with an independent auditor to perform an audit of small dollar claims ($2,500 or less) paid to or denied to Medicaid Long Term Services and Support Providers.  The department may take any action specified in the Managed Care Contract relative to any claim the auditor determines to be incorrectly paid or denied.

ISSUE:  Configuration – At the beginning of the implementation of managed care there were computer glitches and because of those glitches, MCOs did not pay the claim.  Washington County Hospital had told me they had not been paid since managed care went into effect.  I and WCH officials came to Des Moines in the fall and had a visit with DHS to try to get the billing straightened out. We often heard of systemic payment problems and providers were being paid an improper rate.    The implementation of a configuration change was not being done in a timely manner.

  • The amendment requires the MCO’s to correct identified system errors and accurately reprocess the claims affected by the error within 90 days of the discovery of the error. Providers would be paid within those identified 90 days.

ISSUE:  We would hear from providers that each MCO had additional forms and processes to get enrolled as a provider within the organization.  This created a great deal of confusion among providers as they would seek credentialing from the MCO’s.  There also was confusion as to when credentialing would be completed and they would be recognized as a provider of services.

Prior authorization is also a concern.  Some services require authorization by the MCO before the services can be delivered.  This is a great concern of hospitals as they provide medical care.  To receive permission for these medical services create delay and confusion, sometimes at the expense of the patient.  For instance, if a patient arrives at the U of I hospital by helicopter and is treated in the emergency room, prior authorization must be obtained before the patient can be moved to the Intensive Care Unit.

  • The amendment would require DHS, along with providers and MCOs, to initiate a review of prior authorizations with the goal of making adjustments based on relevant costs and member outcome status. Prior authorization policies shall comply with the existing rules, guidelines, and procedures developed by the Capital Centers for Capital Medicare and Medicaid services.
  • The amendment requires DHS to develop, and the MCOs to use, a standardized provider enrollment form. The amendment states that the credentialing process is deemed to begin when the MCO has received all the necessary credentialing from the provider and is deemed to have ended when written communication is mailed or faxed to the provider notifying the provider of the MCO’s decision.

ISSUE:   I have received numerous complaints from clients with disabilities who have seen their waiver services reduced with no explanation given, other than a lower score on their assessment.  This is unfair to those clients.  We want to ensure that members are receiving the proper services for their needs.

  • The amendment would require DHS to approve any Medicaid members’ decrease in care before the MCO institutes any change. The amendment states that the MCO shall comply with the findings of the departmental review and the approval of such level of care reassessment.  The MCOs must share all documentation relating to the member’s level of care assessment with DHS.

ISSUE:  Integrated Health Home – The IHH was designed by DHS and a former MCO, Magellan. The plan offered a holistic community based approach to persons with mental health needs and supports.  It was the first of its kind in the nation and the model has now come under scrutiny, much to the chagrin of the providers and legislators.  MCOs have proposed doing away with this model of care.  Legislators desire a fair process.

  • The amendment requires DHS to facilitate a workgroup with the MCOs and health home providers to review the health home program. The review must include an analysis of the State Plan Amendment and the current health home system, the development of a clear and consistent delivery model linked to program –determined outcomes and data reporting requirements, and a work plan to communicate with stakeholders.  The workgroup must submit a report to the legislature and governor by December 15, 2018 for the legislature’s consideration next session.

The amendment passed out of the House, 97 to 0.  The bill now goes to the Senate where we hope they will accept these recommendations and send them down to the governor for her signature.  It is my hope that these proposals will make a difference in the quality and access of care to Iowa’s needy citizens.

Visitors to the capitol were:  Lacy Harlan-Ralls, Robb Gardner, Dave Weiss and Mark Hempen with the Henry County Health Center;  Josh Ellis, Donnellson, Paula Ellis, Donnellson and  John Sandbothe with Iowa Farm Bureau; Jeff Batty, Mike Wilson, Tammy Tyrrell and Tyler Rodgers accompanied 40 Mount Pleasant Students, guests of Henry County  Farm Bureau;  Jeff Olson, Mt Pleasant with the Henry County Soil Conversation District.


Dave Heaton, State Representative,

State House, Des Moines, Iowa 50319

Phone: 515-281-7327~Fax: 515-281-6958


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