Who could have guessed that privatizing Medicaid would lead to for-profit companies cutting essential services to Iowans with disabilities? Aside from anyone who spent five minutes reading how the same approach had played out in Kansas?

When Iowa Democratic lawmakers sounded the alarm two and a half years ago, Governor Terry Branstad and his aides dismissed the warnings as “Washington D.C.-style partisan attacks.” They insisted privatization would allow Iowa patients to “enjoy the increased quality of service and care that comes with modern plans administering Medicaid.”

Instead, thousands received less in-home care or had trouble accessing medications and services after private insurance companies began managing their cases. The state now faces a class action lawsuit on behalf of 15,000 Iowans with disabilities.

Iowa Department of Human Services Director Jerry Foxhoven admitted yesterday what should have been obvious from the start: letting for-profit companies control access to health care for people with disabilities makes no sense.

Iowa Department of Human Services Director Chuck Palmer is retiring effective June 16, Governor Kim Reynolds announced today. Critics including Democratic State Senator Matt McCoy have called on Palmer to resign for months, charging that inadequate staffing at DHS facilitated more suffering and premature deaths among abused children. The department’s handling of Medicaid privatization has also drawn criticism. Despite Palmer’s promises to hold the line, the DHS agreed to pay private insurance companies more for managing Medicaid. In addition, DHS officials have downplayed numerous, ongoing reports of those companies cutting back on health care services and failing to reimburse providers promptly or adequately.

In keeping with Governor Terry Branstad’s playbook when Teresa Wahlert ended her disastrous tenure at Iowa Workforce Development, Reynolds didn’t acknowledge any problems with Palmer’s management of the DHS today. On the contrary, she and acting Lieutenant Governor Adam Gregg praised Palmer’s work in the official press release, enclosed in full below.

No matter how strained Iowa’s fiscal condition may be, count on Governor Terry Branstad to lend a sympathetic ear to corporations asking for more handouts. Tony Leys brought the latest example to light in a late Friday scoop for the Des Moines Register. The Iowa Department of Human Services will “help private Medicaid management companies shoulder huge losses they’ve suffered in covering more than 500,000 poor or disabled Iowans.” DHS officials estimate the deal struck in February will cost the state about $10 million, “which would be paid more than a year from now.”

The Branstad administration agreed last fall to transfer an extra $33.2 million to the three private firms picked to manage the state’s Medicaid program. It wasn’t enough to satisfy Amerigroup, UnitedHealthcare and AmeriHealth Caritas. They soon asked for much higher payments from the state, saying they were losing money under their contracts. Documents indicate each company lost at least $100 million during the first year of managing care for Iowans on Medicaid, Chelsea Keenan reported earlier this month for the Cedar Rapids Gazette.

One salient fact from Keenan’s story: administrative costs for the insurers totaled 6.8 percent, 11.6 percent, and 11.9 percent of expenditures. Before Branstad unwisely rushed to privatize Medicaid, our state-run program was only spending about 4 percent on administrative costs.

DHS Director Chuck Palmer told reporters in January that the state would not offer the Medicaid managed-care providers more money for the 15-month period running through the 2017 fiscal year. Only weeks later, officials amended the current-year contracts with “risk-corridor agreements” calling for the DHS “to shoulder the management companies’ financial losses if they grow beyond a certain point.”

Federal officials “have signed off on the contract amendments,” but no one informed key legislators about the development. Republican State Representative Dave Heaton, who co-chairs the Health and Human Services Appropriations Subcommittee, found out from Leys.

Speaking of appropriations, where will Iowa find extra money to pay the Medicaid managers? Around the time DHS leaders signed the contract amendments last month, the department was forced to absorb $25.5 million in spending cuts before June 30.

State lawmakers have not yet set fiscal year 2018 budget targets, but money will surely be tight following a recent downward revision to revenue projections. Mid-year budget cuts can’t be ruled out for next year either.

Meanwhile, Medicaid recipients are getting less care than before privatization or having to fight insurance companies over denied claims. Managed-care companies have slashed in-home services for Iowans with disabilities. About a quarter of the Iowans on Medicaid cannot access a program providing transportation to and from medical appointments. AmeriHealth Caritas is cutting payments to agencies that serve people with disabilities, leaving some caseworkers out of a job. Reimbursement problems drove some providers out of business last year.

Given Branstad’s track record of doing whatever big business asks of him, it wasn’t hard to predict that the DHS would end up shoveling more money to the Medicaid managers. The governor’s imminent departure creates an opportunity for Lieutenant Governor Kim Reynolds to learn from her predecessor’s mistakes. Here’s hoping she will demonstrate her capacity for independent thinking by pulling the plug on Iowa’s failed Medicaid privatization.

Two weeks late and humbled by the results from previous efforts to foretell the future, I offer seventeen Iowa politics predictions for the new year.

I struggled to compile this list, in part because it’s harder to come up with things to predict during a non-election year. I didn’t want to stack the deck with obvious statements, such as “the GOP-controlled Iowa House and Senate will shred collective bargaining rights.” The most consequential new laws coming down the pike under unified Republican control of state government are utterly predictable. I needed time to look up some cases pending before the Iowa Supreme Court. Also, I kept changing my mind about whether to go for number 17. (No guts, no glory.)

I want to mention one prediction that isn’t on this list, because I don’t expect it to happen this year or next. I am convinced that if the GOP holds the governor’s office and both chambers of the Iowa legislature in 2018, they will do away with non-partisan redistricting before the 2020 census. I don’t care what anyone says about our system being a model for the country or too well-established for politicians to discard. Everywhere Republicans have had a trifecta during the last decade, they have gerrymandered. Iowa will be no exception. So if Democrats don’t want to be stuck with permanent minority status in the state legislature, we must win the governor’s race next year. You heard it here first.

Rhonda Shouse, a Medicaid recipient and member of Iowa’s Mental Health Planning and Advisory Council, is a leading advocate for Iowans affected by Medicaid privatization. She is an admin for the MCO Watchdog Facebook group and has previously shared resources to help people report problems with managed-care providers. The Cedar Rapids Gazette published a shorter version of this commentary last week. -promoted by desmoinesdem

Iowa Medicaid Enterprises (IME) Director Mikki Stier wrote a guest column on Iowa’s Medicaid Modernization which appeared in the Cedar Rapids Gazette, Fort Dodge Messenger, and Sioux City Journal in April. I am writing in response to Ms. Stier’s column.

If IME considers making it more difficult for Medicaid beneficiaries to get much needed items such as catheters, diapers, medication, transportation to medical appointments, and permission for guardians to represent their wards, then Iowa’s Medicaid Modernization is a huge success. These were not obstacles under the old Medicaid system.

In IA Health Link’s first month, the bulk of the problems point directly to the Department of Human Resources and IME to adequately provide the MCOs with accurate information. It is likely due to the unrealistic time frame established by Governor Terry Branstad, or DHS, depending on who tells the story of who came up with the idea for Iowa’s Medicaid Managed Care program. Most states that have moved to a managed care approach have moved only portions of their beneficiaries at a time and done so over a two to five year period.

It is very unfortunate that Governor Branstad, DHS, and IME have been perpetrating a public relations campaign for more than a year now to misinform Iowans on how their tax dollars will be spent, who Medicaid beneficiaries are, and how services will be delivered to approximately half a million Iowa residents. Healthcare should not be a partisan political issue.

They were so close. Florida-based WellCare played the game almost perfectly to win a contract for its Iowa subsidiary to manage care for Medicaid recipients, which could have been worth hundreds of millions of dollars over the next three years.

The first sign that WellCare’s ambitions might come to nothing attracted little notice, appearing just before the long Thanksgiving weekend. More bad tidings for WellCare arrived yesterday in a late Friday afternoon dump, the classic way for government officials to bury news. Reading Jason Clayworth’s report for the Des Moines Register, it’s easy to see why the Branstad administration sought minimal attention for fixing an embarrassing oversight.

Polk County District Court Judge Douglas Staskal has dismissed a lawsuit challenging Governor Terry Branstad’s authority to veto funding intended to keep two in-patient mental health facilities open. Twenty Democratic state lawmakers and the president of Iowa’s largest public-employee union filed the lawsuit in July, arguing that the governor’s line-item vetoes violated Iowa Code provisions requiring that the state “shall operate” mental health institutes in Mount Pleasant and Clarinda. But Judge Staskal found that “Existing statutes cannot limit the Governor’s item veto authority,” which “is of constitutional magnitude. The only limitations that have been placed on that authority have been derived from the language of the constitution itself. […] And, there is no language in the item veto provision which suggests a statutory limitation on the power it creates. It is elementary that, to the extent there is conflict between a constitutional provision and a statute, the constitution prevails.”

I enclose below longer excerpts from the court ruling, which can be read in full here. Mark Hedberg, the lead attorney representing the plaintiffs, told Bleeding Heartland they “are preparing an appeal” to the Iowa Supreme Court “and will ask that it be expedited.”

Polk County District Court Judge Douglas Staskal ruled yesterday that a lawsuit challenging Governor Terry Branstad’s line-item vetoes of mental health facility funding can move forward.

A group of Democratic state legislators and AFSCME, Iowa’s largest public employee union, filed the lawsuit in July. Last month, attorneys for the state filed a motion to dismiss the lawsuit or force the plaintiffs to “recast” (revise and resubmit) their court filing.

But in a thirteen-page ruling, Judge Staskal rejected the state’s arguments that “the plaintiffs lack standing, have failed to state a claim upon which relief could be granted and that the case presents a nonjusticiable political question.” He found that AFSCME Iowa Council 61 President Danny Homan has standing because he represents the interests of state workers who were laid off when the state government closed in-patient mental health facilities in Clarinda and Mount Pleasant. The judge also noted that state legislators “have standing to challenge the propriety of the Governor’s exercise of his veto authority.” Judge Staskal found plaintiffs had stated a claim: “a challenge to the Governor’s exercise of his line-item veto authority.” As for the political question, the ruling noted, “Whether to close Clarinda and Mount Pleasant is a policy matter for the other branches of government. Whether the Governor’s particular use of his line-item veto power is constitutional is a matter for the courts.”

Judge Staskal did find in favor of one argument advanced by state attorneys, releasing Iowa Department of Human Services Director Chuck Palmer as a co-defendant: “The Director [Palmer] plainly has no authority to veto legislation and there is no allegation that he did veto legislation. Therefore, there is no conceivable set of facts upon which relief could be granted on the claim that the Director exercised an improper veto.”    

The legislators who joined this lawsuit are State Senators Rich Taylor, Tom Courtney, Janet Petersen, Tony Bisignano, Herman Quirmbach, and Dick Dearden, and State Representatives Bruce Hunter, Curt Hanson, Jerry Kearns, Mark Smith, Art Staed, Ako Abdul-Samad, Jo Oldson, Ruth Ann Gaines, Sharon Steckman, Todd Taylor, Mary Gaskill, Kirsten Running-Marquardt, Timi Brown-Powers, and Dave Jacoby.

Iowa’s largest public employee union and 20 Democratic state legislators filed a lawsuit today challenging the closure of mental health institutes in Mount Pleasant and Clarinda. I enclose below a press release from AFSCME Council 61, which lists the six state senators and fourteen state representatives who joined the lawsuit naming Governor Terry Branstad and Department of Human Services Director Chuck Palmer.

The Branstad administration announced plans in January to close two of Iowa’s four in-patient mental health facilities. State legislators were neither consulted nor notified in advance. The Department of Human Services started winding down operations well before the end of the 2015 fiscal year. Democrats fought to include funding for the Clarinda and Mount Pleasant institutes in the budget for the current fiscal year, but Branstad item-vetoed the appropriation. The lawsuit contends that closing the facilities violates Iowa Code, which holds that the state “shall operate” mental health institutes in Mount Pleasant and Clarinda. The governor’s communications director told KCCI that AFSCME’s leader in Iowa “is resistant to change” and that the closed “centers were not suited to offer modern mental health care.”

The Iowa legislature’s decision next year on whether to fund the Clarinda and Mount Pleasant facilities will be critically important. The Iowa Supreme Court recently dismissed the lawsuit challenging the closure of the Iowa Juvenile Home in 2014, without considering the merits of that case, on the grounds that the legislature made the issue “moot” by no longer appropriating state money to operate that facility. By refusing to include funding for the two closed mental health institutes in the budget for fiscal year 2017, Iowa House Republicans could bolster the Branstad administration’s efforts to defeat the lawsuit filed today.

UPDATE: Added more speculation about this lawsuit’s prospects below.

The Iowa legislature’s 2015 session drags on amid unresolved conflict over various budget issues, especially K-12 school funding. But one aspect of the lawmakers’ work is complete for this year. The Democratic-controlled Iowa Senate has confirmed all but one of Governor Terry Branstad’s more than 200 nominees. The overwhelming majority of those votes were unanimous or nearly so.

In recent years, senators have voted against confirming one or two Branstad nominees. This year no nomination failed on the Iowa Senate floor, and only one department head was ever in real danger of not being confirmed to do his job: Department of Human Services Director Chuck Palmer.

Branstad has occasionally withdrawn nominees who didn’t have support from the necessary two-thirds majority in the Iowa Senate. This year the governor didn’t need to exercise that power, although he sidestepped a near-certain rejection by accepting Teresa Wahlert’s resignation in January, rather than reappointing her to run Iowa Workforce Development. In addition, Iowa Law Enforcement Academy Director Arlen Ciechanowski recently announced plans to retire, tacitly acknowledging the votes weren’t there to confirm him.

Follow me after the jump for background on the controversies surrounding Palmer and Ciechanowski and details on Palmer’s confirmation vote–the closest call by far for any Branstad appointee this year.

This morning Governor Terry Branstad stood by Iowa Department of Human Services Director Chuck Palmer and his handling of problems at the Iowa Juvenile Home in Toledo (Tama County). He also spoke confidently about his appeal to Iowa Supreme Court against a Polk County District Court ruling ordering that the Iowa Juvenile Home be reopened.

More background and details are after the jump.  

Medicaid coverage of abortion has been a contentious issue in the Iowa legislature since 2011 and will be on lawmakers’ agenda during next year’s session. I was surprised to learn that Iowa is already more restrictive than most other states when it comes to Medicaid coverage of abortion in cases of rape.

Governor Terry Branstad confirmed yesterday that his administration will not take steps to limit Medicaid funding of abortions without further action by the Iowa legislature.

Opposing all government funding for abortion is settled dogma among Iowa Republican activists and elected officials. For two years in a row, Senate Democrats have blocked attempts to write new restrictions on Medicaid abortion coverage into the budget for the state Department of Human Services. Now DHS Director Chuck Palmer has signaled that taking control of the upper chamber may not give Republicans the power to restrict the choices of low-income women.

Palmer’s action puts Governor Terry Branstad in an awkward position, and a legislature completely under GOP control could create a political nightmare for Branstad, a proud “pro-lifer” throughout his career.

Governor-elect Terry Branstad announced today that ophthalmologist Dr. Mariannette Miller-Meeks will run the Iowa Department of Public Health in his administration. A press release noted that Miller-Meeks “has served as the first woman President of the Iowa Medical Society and was the first [woman] on the faculty in the Department of Ophthalmology at the University of Iowa and councilor for Iowa to the American Academy of Ophthalmology.” Miller-Meeks was the Republican nominee in Iowa’s second Congressional district in 2008 and 2010. She worked hard during both campaigns but lost to Dave Loebsack in Iowa’s most Democratic-leaning Congressional district.

Also on December 9, Branstad announced that he will tap Chuck Palmer to head the Department of Human Services in his administration. Palmer did that job during Branstad’s previous time as governor from 1989 to 1999. Most recently he has been president of Iowans for Social and Economic Development, “an asset development organization with the mission of creating opportunities for low and moderate income Iowans to increase income and achieve financial stability.”

Branstad has pledged to reduce the size of state government by 15 percent, and keeping that promise would likely require significant cuts in the departments Miller-Meeks and Palmer will be running. The current budget (fiscal year 2011) allocated $935.5 million from the general fund to health and human services. That’s 17.7 percent of the general fund budget alone, or 15.9 percent of total state expenditures, including federal stimulus money and reserve funds as well as general fund spending. More than $200 million in federal stimulus money supported Iowa’s Medicaid budget in the current budget year, but similar support won’t be forthcoming in future years now that Republicans have a majority in the U.S. House of Representatives.

Branstad administration press releases on Miller-Meeks and Palmer are after the jump.