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Iowa DHS Awards Two Additional Managed Care Contracts

Amerigroup Iowa and Molina Healthcare of Iowa were awarded managed care contracts

August 31, 2022The Iowa Department of Human Services which oversees the Medicaid program, was looking for new managed care organizations to provide care through the Iowa Health Link Medicaid program. These new contracts come on the heels of two for-profit insurers exiting the Iowa Medicaid program over heavy financial losses. 

The Iowa DHS expects that increasing the number of providers serving Medicaid patients will improve health outcomes, patient choice, and quality of care. 

 Contracts were expected to be procured with up to four bidders, but the final number of contracts awarded was up to the discretion of Iowa DHS. 

The five insurance companies who submitted bids to provide managed-care services are:

  • Aetna (dba Aetna Better Health of Iowa)
  • Amerigroup Iowa
  • CareSource Iowa 
  • Molina Healthcare of Iowa 
  • UCare Iowa (dba Ucare)

Currently, of the five bidders, Amerigroup Iowa is already providing services as an Iowa Medicaid managed-care organization. Total Care Iowa is the other managed care organization providing Medicaid health benefits in the state. Amerigroup’s contract is set to expire in 2023 and Iowa Total Care’s contract expires in 2025.

On August 31, 2022, Iowa DHS announced the intent to award managed care contracts to both Amerigroup Iowa and Molina Healthcare of Iowa. The contracts are worth approximately $6.5 billion annually and implementation will begin on July 1, 2023. Iowa Total Care will continue with its contract through 2025.

Stakeholders are hopeful that adding a third managed care organization will increase patient choice and health outcomes. 

“We really want members to be able to make choices based on something other than which provider is in each one of the managed care organizations network,” Iowa Medicaid Director Elizabeth Matney said in an interview.

However, there is some concern that the shift will come with growing pains. 

“I do believe the management team at Iowa HHS will do a better job of helping with this transition to adding a third (managed care organization) than we have seen in the past,” added state Sen. Pam Jochum, a Democrat from Dubuque. “But having said that, it will still be a tremendous upheaval for providers, for Medicaid members and for their families.”

To help maintain a smooth transition, stakeholders will be involved in the process. A Medicaid member town hall meeting with state officials is scheduled for September 8, 2022. Details can be found on the Department of Human Service’s website.

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