Iowa hospital leaders want a judge to slam the brakes on the state’s shift to private management of its Medicaid program.
The hospitals say in a new lawsuit that the controversial move would illegally take money from a trust fund to which they contribute. They also say it would deprive them of rewards the state promised them for participating in recent programs to make Medicaid patient care more effective and efficient.
The lawsuit was filed in Polk County District Court last week by the Iowa Hospital Association and leaders of 11 hospitals. They’re asking a judge to put a hold on the planned Jan. 1 transfer of Medicaid management to four private companies. The Iowa Department of Human Services and its director, Charles Palmer, are named as defendants.
Iowa’s $4.2 billion Medicaid program provides health insurance for 560,000 poor or disabled people. It is financed jointly by the state and federal governments.
Gov. Terry Branstad decided early this year to shift management of the program to private companies, which he contends could provide services more efficiently and effectively. The change is to take effect Jan. 1, which critics say is much too soon. The managed-care companies signed contracts with the state just last month, and federal officials have not yet approved the shift.
A spokesman for Branstad said Tuesday that his office does not comment on pending litigation. The governor, who also faces a legal challenge from managed-care companies that were passed over for the contracts, has vowed to press ahead.
The new lawsuit says hospitals and other health care providers are being “strong-armed” into signing contracts with the managed-care companies by Jan. 1 even though the companies have not yet set payment rates for services. The state is threatening to cut Medicaid payment rates by 10 percent to any health care provider that doesn’t sign up quickly with the managed-care companies, which the suit says is illegal.
The suit also says Iowa’s Medicaid program has saved millions of dollars in recent years through efforts to improve coordination of care, including for people who have both mental and physical health problems. The suit says the state Department of Human Services “made a clear and definite promise” that it would continue those efforts and keep paying the bonuses that health care providers gained for participation. But the programs will be significantly changed or ended if the state shifts management of its Medicaid program to private companies, the hospital leaders say.
The suit also says the state’s private-management plan would illegally use money from a trust fund set up with contributions from hospitals. That trust fund, which collects nearly $35 million annually from hospitals, is designed to draw down tens of millions of extra federal Medicaid dollars, the suit says. It is supposed to help pay participating hospitals for their services, and it is supposed to be overseen by a separate board that includes hospital representatives, the suit says. “Director Palmer and DHS have neglected and refused to convene the board, despite demand," the suit says. "Palmer and DHS' failure and refusal to convene the board is contrary to the plain language of the statute, which specifically provides for board oversight over the trust fund.”
The department has indicated it would funnel the fund’s money through the managed-care companies, which the hospitals say violates a code section saying the money may only be disbursed to participating hospitals.
http://www.press-citizen.com/story/...als-sue-block-medicaid-managed-care/75511950/
The hospitals say in a new lawsuit that the controversial move would illegally take money from a trust fund to which they contribute. They also say it would deprive them of rewards the state promised them for participating in recent programs to make Medicaid patient care more effective and efficient.
The lawsuit was filed in Polk County District Court last week by the Iowa Hospital Association and leaders of 11 hospitals. They’re asking a judge to put a hold on the planned Jan. 1 transfer of Medicaid management to four private companies. The Iowa Department of Human Services and its director, Charles Palmer, are named as defendants.
Iowa’s $4.2 billion Medicaid program provides health insurance for 560,000 poor or disabled people. It is financed jointly by the state and federal governments.
Gov. Terry Branstad decided early this year to shift management of the program to private companies, which he contends could provide services more efficiently and effectively. The change is to take effect Jan. 1, which critics say is much too soon. The managed-care companies signed contracts with the state just last month, and federal officials have not yet approved the shift.
A spokesman for Branstad said Tuesday that his office does not comment on pending litigation. The governor, who also faces a legal challenge from managed-care companies that were passed over for the contracts, has vowed to press ahead.
The new lawsuit says hospitals and other health care providers are being “strong-armed” into signing contracts with the managed-care companies by Jan. 1 even though the companies have not yet set payment rates for services. The state is threatening to cut Medicaid payment rates by 10 percent to any health care provider that doesn’t sign up quickly with the managed-care companies, which the suit says is illegal.
The suit also says Iowa’s Medicaid program has saved millions of dollars in recent years through efforts to improve coordination of care, including for people who have both mental and physical health problems. The suit says the state Department of Human Services “made a clear and definite promise” that it would continue those efforts and keep paying the bonuses that health care providers gained for participation. But the programs will be significantly changed or ended if the state shifts management of its Medicaid program to private companies, the hospital leaders say.
The suit also says the state’s private-management plan would illegally use money from a trust fund set up with contributions from hospitals. That trust fund, which collects nearly $35 million annually from hospitals, is designed to draw down tens of millions of extra federal Medicaid dollars, the suit says. It is supposed to help pay participating hospitals for their services, and it is supposed to be overseen by a separate board that includes hospital representatives, the suit says. “Director Palmer and DHS have neglected and refused to convene the board, despite demand," the suit says. "Palmer and DHS' failure and refusal to convene the board is contrary to the plain language of the statute, which specifically provides for board oversight over the trust fund.”
The department has indicated it would funnel the fund’s money through the managed-care companies, which the hospitals say violates a code section saying the money may only be disbursed to participating hospitals.
http://www.press-citizen.com/story/...als-sue-block-medicaid-managed-care/75511950/
