Hospitals balk at Iowa's proposed $37 million Medicaid cut
Iowa is seeking federal permission to slow the pace of enrollees entering its Medicaid program via a new waiver request. The move is expected to save the state nearly $37 million annually, but puts hospitals at financial risk, according to the state's hospital association.
Specifically, Iowa is seeking to end an ACA provision that allows people to obtain Medicaid coverage the day they apply, assuming the applicant qualifies for benefits. Providers can also bill for services provided in the three months before the application, assuming the patient was eligible during that time.
Iowa submitted the request as an amendment to its Medicaid expansion waiver. The CMS will accept comments on the proposal through Sept. 7.
Elimination of retroactive coverage is expected to reduce monthly enrollment by 3,344 enrollees and reduce annual Medicaid spending by $36.8 million, according to a state estimate.
"This amendment will place a significant financial burden on hospitals and safety-net providers and reduce their ability to serve Medicaid patients," Natalie Ginty, director of government relations and staff legal counsel for the Iowa Hospital Association, said in a statement. "It will likely translate into increased bad debt and charity care for Iowa's hospitals and will affect the financial stability of Iowa's hospitals, especially in rural communities."
Iowa Medicaid officials acknowledged provider concerns in its waiver application, but noted its hands were tied after state legislators passed a bill calling for the amendment this year.
To date, Arkansas, Kentucky, Indiana and New Hampshire have either won permission to waive retroactive eligibility or have a pending request with the CMS to do so.
As of May 2017, Iowa has enrolled 630,792 individuals in Medicaid and CHIP—a net increase of 27.82% since the marketplaces opened in October 2013.
From fiscal 2013 to 2016, total Medicaid spending in Iowa jumped more than $1 billion to $4.7 billion, according to federal data.
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