From other editors: Overdue answers on Medicaid
Auditor’s report shows savings were less than predicted; other questions remain
It’s a bit bureaucratic, but on page 15 of the new review of the various cost saving estimates from Iowa’s Medicaid program, there is this extraordinary line:
“However, during the decision making process to move the Medicaid program from primarily a fee-for-service program to a managed care program, the method or parameters to be used to estimate the program savings were not established.”
In short, what this line means is this: In early 2015, when the Branstad administration initiated moving Iowa’s Medicaid program to private management, nobody stopped to figure out a way to verify what the cost savings might actually be.
Let that sink in for a moment. A primary rationale for this change has that it would save money. You’d think somebody would have asked, “Hey, how do we figure out if our assumptions hold up?”
Apparently, nobody did.
As a result, savings estimates have bounced around like a ping pong ball. In early 2017, the governor’s office put savings at $234 million. Ten months later, that had plummeted to $47 million. Six months after that, it bounced back up to $141 million.
This week’s report, from the office of outgoing State Auditor Mary Mosiman, said the state Department of Human Service’s May, 2018, methodology for determining such savings was a good one — and that, based on updated data, the state saved roughly $126 million in fiscal year 2018 over what it would have spent had it stayed with the previous fee-for-service Medicaid program.
That’s about $100 million less than the Branstad administration initially predicted.
It goes without saying, it should not have taken this long to figure out this basic a question.
We don’t look askance at $126 million in savings, if that’s the most accurate figure. Frankly, after all the various estimates about purported Medicaid savings, we’re not fully sold that this is the last word on the question.
But what we also find significant about this report is its limitations.
It doesn’t tell us much — actually, anything — about how these savings came about. And it doesn’t tell us what the impact is from the reduced spending amounts.
We have heard legions of reports about health care providers not getting paid by the state-hired private insurers. We would ask how much of the state’s savings were shouldered by hospitals, doctors and others who had claims denied or still are waiting on payment. And how, then, did that affect the services they provided to their patients?
How much of these savings came from services the managed care organizations denied?
How much came from more coordinated care?
It seems to us there hasn’t been much oversight by the Republican-controlled legislature on these questions.
Rob Sand, the Democrat who defeated Mosiman in the Nov. 6 election, has pledged that his review of the managed care experience will be more comprehensive.
No doubt, that will open up even more partisan skirmishes in Des Moines over Medicaid. But we welcome more light on this issue.
We have repeatedly stated our concerns about the rising cost of the Medicaid program, which the state allocated $1.34 billion from its general fund in fiscal year 2019. (And just a couple of months ago, the Iowa Department of Human Services estimated that it would need another $145 million by fiscal year 2021.)
We also know, however, that this program is vital to 600,000 Iowans, many of them some of our state’s most vulnerable individuals. This program must work for all of them. And fully examining whether they are getting the care they deserve is a tougher, but more important, question to answer.
Some have argued the auditor’s report should have been released before the Nov. 6 election, given the importance of the Medicaid issue to the gubernatorial and legislative elections.
Frankly, we think clarity on this aspect of the Medicaid transition was needed long before that.
Let’s hope that the answers to these other questions aren’t also similarly delayed.
Nov. 28, 2018