Iowa Medicaid director says privatization is saving the state money but questions linger

Medicaid Director Mike Randol takes questions from the DHS Advisory Council Wednesday about how much the privatized Medicaid program is saving the state. Randol boasted a $141 million figure, but critics argue that number is incomplete and want further information. (Photo: Caroline Cummings)

Iowa's Medicaid director said Wednesday the state is projected to save money under the privatized program this budget year but didn't offer many details about just how it's cutting costs.

Medicaid director Mike Randol told a Department of Human Services Council that the managed care Medicaid system is projected to save the state $140.9 million this budget year, which ends July 30. He declined to offer specifics of how his staff arrived at that number, which is triple a $47 million December estimate.

“I think it’s important to understand that regardless of the methodology, there are savings,” said Randol, who also said the cost savings analysis was a comparison between what the state spent on its Medicaid prior to privatization and what the state spends since it turned the program over to managed care organizations.

“We want to make sure we have apples to apples," Randol said.

But sharp critics of the privatized Medicaid program providing health care services to 600,000 poor and disabled Iowans across the state contend that $141 million is an incomplete number, failing to take into account outstanding payments to providers and reductions in care.

“What I heard is rhetoric. I did not hear detailed examples of how that savings occurred," said state Sen. Amanda Ragan, D-Mason City, who sits on the council and has been vocal about privatized Medicaid in the legislature.

Council members were not given any handouts or further details regarding the fiscal analysis from Randol, who spoke to the group for about 20 minutes. Randol said he has been "very open about transparency."

He also did not address any cumulative savings since privatization kicked-in in 2016 under Republican Governor Terry Branstad. At the time of implementation, Branstad boasted that the program would save the state $232 million by this 2018 budget year.

Sen. Pam Jochum, D-Dubuque, was looking on during the meeting, and said afterwards that she does not believe the projected cost savings does not take into account all of the factors.

"[Randol] owes it to us. We need more accurate numbers," Jochum told reporters afterwards.

Jochum also asked state auditor Mary Mosiman to conduct an independent review of the state's claims of savings under the program; Mosiman agreed.

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