On Feb. 16, the Iowa Department of Human Services released a request for proposal (RFP) to modernize the Medicaid program. The purpose of the initiative is to improve the coordination and quality of care for Medicaid members while providing some predictability in the Medicaid budget for Iowa taxpayers.
According to the DHS press release, the main objectives of this Medicaid Modernization project are:
• Improving quality and access
• Promoting accountability for outcomes
• Creating a more predictable and sustainable Medicaid budget
The RFP includes the Iowa Medicaid, Iowa Health and Wellness Plan and Healthy and Healthy and Well Kids in Iowa (hawk-i) programs. Substance abuse is also covered in the RFP under the Iowa Department of Public Health, but it will be paid for by a Federal Block Grant.
The RFP requests bids from potential vendors. These vendors will bid on components within the RFP. The State will contract on a statewide basis with between two and four entities with a demonstrated capacity to coordinate care and provide quality outcomes for these populations.
The governor proposed this initiative in his budget this year. His budget includes more than $50 million in cost savings in the first six months that managed care is implemented in Iowa. He chose to go this route because the cost of the Medicaid program in Iowa has grown 73 percent since 2003.
The program costs more than $4.2 billion a year of state and federal funds to implement. The RFP will allow DHS to contract with modern health plans that will be better equipped to coordinate care and manage spending. Spending will be better managed by these companies because the companies will bear the risk while the state will continue to focus on quality improvement.
This is not the first time that Iowa Medicaid has utilized managed care companies to coordinate care for a portion of the Medicaid program. Iowa has used such companies to oversee parts of its Medicaid program, including care for people with serious mental illnesses and people with behavioral health issues.
Nationwide, 70 percent of Medicaid participants nationally have their care overseen by managed-care companies.
I look forward to seeing you at one of the next legislative forums on Friday, Feb. 27:
8 a.m. – Wayne County Farm Bureau (Corydon)
10 a.m. – Chariton Mosaic (Chariton)
Noon – Lakeside Casino (Osceola)
2 p.m. – Leon Community Center (Leon)