What’s on your mind this weekend, Bleeding Heartland readers? This is an open thread: all topics welcome.
In what the Des Moines Register’s editors described as a “new low in the out-of-control race to keep or attract employers,” a state board unanimously approved $4.75 million in financial assistance to Kraft Heinz, which plans to replace a large factory in Davenport with a new facility on the northwest side of town. Although at least 900 people are expected to lose their jobs in the downsizing, the city of Davenport will put up $10 million in tax-increment financing to support the project. The Iowa Department of Transportation and the city are expected to commit $5.8 million for road work around the new factory site too. Never one to shy away from handing state funds to large corporations, Iowa Economic Development Authority Director Debi Durham has let all downsizing companies know that the state of Iowa’s wallet is open: “‘Will I take this deal any day? You bet,’ Durham said Thursday morning. ‘This is a future play.'” Durham also told reporters she “expects the state to do more of these kinds of deals in the future, as more massive companies merge.”
Iowa State University economist Dave Swenson characterized the Kraft Heinz incentive package as “bizarre,” adding, “The idea of providing public assistance for a company that has billions of dollars of annual sales cannot make sense to anybody.” The Register’s editors noted, “the company could get $20.75 million in state and local assistance,” which “works out to nearly $43,700 for every job Kraft Heinz agrees to keep”–and roughly 200 of the jobs the company promised to save will pay less than $37,000 a year.”
Speaking of lousy deals, Iowa’s plan to privatize Medicaid looks worse and worse. A post in progress will discuss this policy in more detail; for now I enclose below excerpts from several stories by Jason Clayworth for the Des Moines Register. In recent weeks, Clayworth has exposed damning facts, including:
• Some claims made in bidding documents from the four private insurers chosen to manage Medicaid in Iowa “contain unverifiable data, misleading statements or half-truths.”
• No data support the government’s estimate that privatizing Medicaid would save $51 million from the state budget during the first six months of the program.
• The insurers selected to manage Medicaid “have each been held accountable in other states for serious service and administrative errors, including some that wrongly delayed or denied medical services to poor residents […].”
• Iowa’s Medicaid director Mikki Stier “had improper communications with an insurance company consultant and former lawmaker during a critical review period that ended with the for-profit company being selected” as a managed care provider for Medicaid.
A November 6 letter from the Centers for Medicare and Medicaid Services to Stier enumerated “significant concerns” about the transition to managed care; excerpts from that letter are at the end of this post. Federal officials and Iowa Senate Democrats have scheduled “listening sessions” around the state to focus on Medicaid privatization. Click through for meeting details, as well as a list of state and federal officials to contact with concerns. Only the feds can stop this train by denying the necessary waivers. Branstad administration officials have been unmoved by any of the Register’s revelations or by the risks to vulnerable Iowans, which many speakers raised during Legislative Oversight Committee hearings on November 3.
From Jason Clayworth’s story for the Sunday Des Moines Register on November 8:
The questionable information was provided to Iowa officials in public bid documents used to help the companies edge out competitors to win the lucrative contracts.
The Register could find nothing to suggest that the Iowa Department of Human Services, the agency that oversaw the selection process, did its own fact-checking of claims included in the winning bids.
Among the Register’s findings:
• Amerigroup claimed its Maryland affiliate has a pharmacy program that reduced hospitalizations by 36 percent, emergency room visits by 17 percent and prescriptions by 20 percent during an unspecified time frame. But the Maryland Department of Health and Hygiene says it can’t verify these claims. The company declined to comment or provide data to substantiate the claims, citing an ongoing court challenge to Iowa’s bid selection process.
• WellCare credited its Hawaii affiliate’s care plan with reducing hospital admissions by 26 percent, and with cutting length of hospital stays by 37 percent overall and by 17 percent for acute patients. Officials from the Hawaii Department of Human Services said they were unable to confirm the accuracy of WellCare’s calculations. The agency provided information that showed reductions in all three categories from 2013 to 2015, but not to levels cited by WellCare in its undated data. Asked to explain the discrepancy, WellCare said its analysis used 2006 data — four years before it began working with Hawaii — as the baseline for comparison. A spokeswoman said those data were the most current available and defended the comparison as fair and accurate.
• UnitedHealthcare said its Kansas affiliate reduced premature births by 23 percent from 2013 to 2014 and some types of emergency room visits by more than 10 percent. Officials from the Kansas Department of Health and Environment said it could not verify the information. A UnitedHealthCare spokeswoman responded that the company remains confident in the data it provided.
• AmeriHealth said its Pennsylvania programs reduced congestive heart failure admissions by 21 percent from 2013 to 2014. Pennsylvania officials said they couldn’t verify those numbers. AmeriHealth said the figure was the result of “internal medical management monitoring” but declined to share that data with the Register.
From Clayworth’s October 28 story on “improper communications” between Iowa’s Medicaid director Mikki Stier and former state lawmaker Renee Schulte, who was consulting for WellCare during the bidding process.
From Clayworth’s October 15 report for the Register:
A state agency says it has no documents or even a list of experts consulted to support its claim that a controversial plan to hire private companies to manage its Medicaid program would save taxpayers $51 million during its first six months. […]
The Register sought documents detailing the process an agency employee described during an Oct. 2 court hearing when she was asked how she arrived at the Medicaid savings estimate.
Jean Slaybaugh, a DHS fiscal manager, testified that experts predicted that turning management of Iowa’s annual $4.2 billion Medicaid program over to private contractors could save anywhere from nothing to as much as 15 percent under the plan, which is scheduled to begin Jan. 1, pending federal approval.
Slaybaugh further testified that — at DHS Director Chuck Palmer’s request in August 2014 — she selected a midpoint of the estimates, which amounted to about 7.5 percent, or roughly $51.3 million, over the privatized program’s first six months.
The Register asked for copies of the estimates Slaybaugh used to calculate the number. DHS spokeswoman Amy Lorentzen McCoy responded this week that no such documents exist.
From Clayworth’s September 20 report for the Register:
Among the the problems for which the companies selected to run Iowa’s program were cited:
CANCELED APPOINTMENTS: UnitedHealthcare was fined $186,000 by the state of Tennessee in 2010 for canceling appointments without proper notification.
PRIVACY BREACHES: The state of Texas fined Amerigroup $105,000 in 2014 for failure to notify patients of a privacy breach.
UNTIMELY PROCESSING: Pennsylvania fined AmeriHealth more than $39,000 for tardy claims processing and payments to medical providers in 2010, 2012, 2013 and 2014.
INFORMED CONSENT: Ohio fined WellCare $20,000 for failing to properly inform patients of the risks and other consequences associated with medical procedures such as abortions, sterilizations and hysterectomies.“This is horrible,” said Dean Lerner, former head of the Iowa Department of Inspections and Appeals. “This information alone — Iowa’s inability to hire a contractor that hasn’t defrauded the government — should be enough” for the federal government “to refuse to grant the state permission to privatize management of Medicaid.”
Chelsea Keenan reported for the Cedar Rapids Gazette on the November 6 letter from Timothy Hill of the Centers for Medicare and Medicaid Services to Iowa Medicaid Director Mikki Stier. Excerpt:
“CMS has significant concerns that the implementation time frames for the transition to managed care may place access, continuity of care and quality of care for beneficiaries at risk,” wrote Timothy Hill, deputy director for the Center for Medicaid and CHIP Services at CMS, in a letter dated Nov. 6.
“We are also concerned about the extent to which managed care organizations, providers and Medicaid beneficiaries are prepared for the transition.”
CMS has asked Iowa to meet several “readiness benchmarks,” including establishing adequate provider networks and communicating the transition with beneficiaries.
In its Nov. 6 letter to Stier, CMS laid out a list of concerns it has regarding the transition.
They include:
• The extent to which the managed care organizations have hired and trained staff as well as developed necessary IT infrastructure.
• The extent to which managed care organizations have developed an adequate networks of providers. For the state to receive an approval waiver, each managed care organization must have a meaningful percentage of providers under contract.
• The adequacy of the information, time and support for enrollees to make an informed managed care organization selection. This concern is particularly important for individuals receiving long-term care services.
• The overall readiness of the state and managed care organizations to address administrative issues associated with the transition. This is especially significant for issues related to beneficiaries’ continuity of care.