- Associated Press - Thursday, October 8, 2015

DES MOINES, Iowa (AP) - A state official says $51 million in savings cited by Iowa as a reason for privatizing its Medicaid program is a midpoint of wide-ranging estimates from experts.

Iowa Department of Human Services fiscal manager Jean Slaybaugh testified last week that experts’ estimates of savings range from nothing to 15 percent. She said she chose a midpoint of the estimates at the request of the department’s director, Chuck Palmer.

The $51 million estimate for the first six months of privatization was factored into the state budget passed by the Legislature earlier this year. Republican state Rep. Dave Heaton said last month that failing to privatize Medicaid and get savings would lead to a major budget shortfall.

Democratic state Sen. Amanda Ragan said she would likely ask Slaybaugh to testify at oversight hearings on Medicaid privatization that begin Nov. 3.

The state plans to sign contracts with four companies Friday that would privatize Medicaid management on Jan. 1. The move requires federal approval.



The Des Moines Register (https://dmreg.co/1VGN6X6 ) reports Slaybaugh testified in court as part of a request by Aetna, which wasn’t chosen, for a stay in signing contracts. A judge denied the request.

Aetna and two other companies have challenged how Iowa awarded contracts. Their grievances are expected to be reviewed by an administrative law judge in late October or early November.

Slaybaugh did not identify the experts during testimony, but said that they included “subject matter experts from an actuarial firm.” Department of Human Services spokeswoman Amy Lorentzen McCoy said Tuesday that officials aren’t sure if a document exists that has all the sources used in Slaybaugh’s estimate.

Lorentzen McCoy said the department believes privatizing Medicaid will improve members’ health while also finding savings for the program.

Ben Hammes, spokesman for Gov. Terry Branstad, said in response to questions about the savings estimate that Branstad won’t accept the status quo of increased costs and lack of health improvements.

“Gov. Branstad has confidence that DHS and Director Palmer are taking the necessary steps to implement Medicaid modernization while relying on actuarial calculations for savings through the development” of the public bids, Hammes said in a statement.

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Information from: The Des Moines Register, https://www.desmoinesregister.com

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