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State

Iowa seeks to cut Medicaid health care benefit to save money

DES MOINES (AP) — Iowa is seeking federal approval to cut a key Medicaid health care benefit for the elderly and poor in an effort to save money.

The state has asked the Centers for Medicare and Medicaid Services to eliminate a provision that allows a person to get Medicaid coverage three months before he or she submits an application to join the program. The provision ensures a care facility receives retroactive Medicaid payment for treating some patients who are suddenly sick or in an accident.

The move was mandated in a budget bill approved months ago by the GOP-controlled Legislature that added cost-containment initiatives, but it still requires federal approval. Republican Gov. Kim Reynolds was still lieutenant governor when the legislation was approved, but her staff said Thursday she supports the move.

The Iowa Department of Human Services estimates the change, which would impact new Medicaid patients, would save about $36.7 million annually. That includes about $9.7 million for the state.

DHS said it hopes to implement the changes on Oct. 1. The state notes it would offer more limited retroactive coverage, making it effective the first day of the month in which a Medicaid application was filed.

In documentation supporting the move, DHS wrote that the change would align Medicaid with the commercial market, which doesn’t offer such a retroactive policy. Iowa’s Medicaid program serves more than 600,000 low-income and disabled residents. The elimination of the coverage is expected to reduce monthly enrollment by more than 3,300 people.

“Eliminating Medicaid retroactivity encourages individuals to obtain and maintain health insurance coverage, even when healthy,” according to the documentation.

Brenna Smith, Reynolds’ press secretary, said in an email the governor supports the plan, pointing out the approved legislation has “items to efficiently manage the rising cost of Medicaid spending.”

Several groups and health care providers oppose the proposal, which has been introduced in a handful of other states.

Wayne Marple, chief financial officer for Inhance Corp., which owns two rural Iowa care facilities, submitted comments to the federal program that argued the change would shift costs to patients and providers.

“Our nursing homes will no longer admit any prospective resident who is Medicaid-pending, or will become Medicaid-pending shortly after admission,” he wrote. “This will result in other providers, primarily hospitals, to incur larger amounts of charity care due to a reduced source of payment for medical services.”

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