Integris Executive Who Saw Iowa Medicaid Privatization Tells Lawmakers It's 'Difficult' Change

Feb 8, 2021

Credit KWGS News file photo

An executive at Oklahoma’s largest health care system told Oklahoma lawmakers he’s wary of Gov. Kevin Stitt’s current plan to privatize the state’s Medicaid program.

Integris Health Chief Transformation Officer Aric Sharp experienced Iowa’s transition to managed care organizations a few years ago while working for a hospital system there. He spoke to lawmakers at a session hosted by Appropriations and Budget Subcommittee on Health Chair Rep. Marcus McEntire (R-Bristow) dubbed "Medicaid 101." McEntire opposes Stitt's switch from state oversight of its Medicaid program to managed care organizations, but the session provided an overview for lawmakers unfamiliar with Medicaid.

Sharp told lawmakers Iowa's transition from a fee-for-service to an MCO model was difficult and involved a lot of change.

"And when you take that and you multiply it times — in Iowa it was three different MCOs, and here in Oklahoma it’s four MCOs — just the administrative framework and the burden that puts on providers is pretty complex. There’s a real cost to what we have to do to function within that model," Sharp said.

A Harvard paper found Iowa’s switch to MCOs drove up costs for University of Iowa hospitals through new prior authorizations for service and claim denials, and that the companies eventually said the state’s payments to them didn’t cover their members’ medical costs.

A state auditor’s report released last summer confirmed those problems were happening across Iowa. A survey for the auditor's report found hospitals overwhelmingly found guidelines stricter under MCOs, were dissatisfied with payments from them and had services denied more frequently, leading providers to cover the cost of care. According to the same report, more than half of Iowa’s Medicaid providers said privatization has harmed patients or impeded their access to care. Just 6% said privatization had been beneficial.

Sharp told Oklahoma lawmakers it's crucial the state's providers meet with chosen MCOs to talk about value-based care, and he doesn't mean navigating prior authorizations and claim denials.

"Those sort of financial gymnastics, if you will, really can clog the system. So, when we’re sitting at the table with them, we’ll be talking about things like how do we get behavioral health to the beneficiaries that need it? How do we attack the social determinants of health? How do we — are you willing to share your claims data with us so that we can get a better picture of the population that we’re trying to serve?" Sharp said. "Typically, the MCOs don’t want to lean into some of those things."

Oklahoma medical groups and a significant contingent of lawmakers have been outspoken in their opposition to the move to an MCO model. Oklahoma abandoned managed care in the early 2000s after trying it out starting in the late 1990s because remaining companies demanded a nearly 20% rate hike.