Iowa State Auditor Rob Sand hosted a town hall at Iowa City on Thursday and fielded questions from residents on the top issues from his office.

Sand addressed topics concerning health care accessibility, the newly-instated law that limits his office’s powers, and how the University of Iowa serves as a good example of the importance of the auditor’s office.

About 25 people attended the event, including Iowa City Mayor Bruce Teague, Rep. Adam Zabner, D-Iowa City, Iowa Sen. Janice Weiner, and multiple city council members.

Increasing oversights of managed care organizations

Johnson County Public Health Director Danielle Pettit-Majewski asked Sand about increasing oversight of Iowa’s managed care organizations, a $7 billion program with privatized Medicaid.

“I feel like [the program] is set up to help Iowans fail,” Pettit-Majewski said. “We have the least amount of information to be successful with the information.”

Iowa now has three health insurance companies, or managed care organizations, running its Medicaid program: Amerigroup Iowa, Molina Healthcare of Iowa, and Iowa Total Care. The Medicaid program serves over 700,000 low-income Iowans.

Pettit-Majewski said she spoke with Iowa Department of Health and Human Services Director Kelly Garcia during an Iowa State Association of Counties meeting in August. While discussing public health matters in the state, Garcia reportedly said there was an “appetite for oversight” of the managed care organizations in Iowa, according to Pettit-Majewski.

Sand said he was surprised to hear there was interest in monitoring the programs at a statewide level.

“Anytime we expand the number of people who want to increase oversight on [managed care organizations] is a day to celebrate,” Sand said. “I don’t know if Director Garcia was speaking for herself, personally, or on behalf of the administration, but it’s really encouraging for me to hear.”

Sand’s office analyzes the change in appeal decisions from the denials of medical care in the state, incorporating feedback from the Department of Public Health and Human Services.

Sand said that his office saw a 500 percent increase in illegal denials of care in 2021.

“These companies are supposed to be good at this, that’s why we hired them. But they’re failing,” Sand said.

High rates of denial from privatized Medicare are not unique to Iowa.

The U.S. Department of Health and Human Services released a report in July finding that one in eight requests for health care through managed care organizations were denied in 2019.

“Despite the high number of denials, most state Medicaid agencies reported that they did not routinely review the appropriateness of a sample of MCO denials of prior authorization requests, and many did not collect and monitor data on these decisions,” the report stated.

Pettit-Majewski said the churn in managed care organizations has caused concern in Johnson County.

“Medicaid privatization was supposed to make things easier,  it’s supposed to help,” she said in an interview with The Daily Iowan. “It was supposed to help control costs and increase benefits to the community. I think most providers, and most folks who advocate for those who need those services, would disagree that that’s been the case.”

The need for Medicaid has risen in the last decade, with 82 million people enrolled in Medicaid in 2022, a 52 percent increase compared to June 2012, according to the U.S. Health and Human Services Department’s report

“You would think inappropriate denials of care, meaning the number of times that a person on the program is denied care, then goes to a judge and is reversed,” Sand said. “But no, they said it’s the wrong decision. And they said that at a 500 percent higher rate.”

Sand said the increased rate only applies to those who appeal their denial of care, and the number is much higher for those who don’t make their concerns public.

“What we know about people who are a part of these programs is that they have a lower level of resources,” Sand said. “They typically have lower levels of education achievements, and English may not be their first language. That’s who this is hurting.”

Teague, who also serves as the CEO of Caring Hands and More, a home care services business that provides Medicaid options, said he is familiar with seeing denials.

“The biggest thing we have encountered is the run-a-round for payments,” Teague said. “When United Healthcare left [Iowa], we had to write off a lot of stuff because you couldn’t get in contact with anyone that could help solve your issues. So then you’re just left providing the services without getting the numbers.”

State Rep. Adam Zabner, D-Iowa City, said he hears concerns about managing care organizations in Iowa City.

“It’s probably the most common request I get from constituents, going to MCOs and having difficulty getting them covered,” Zabner said.

Sand hopes to hear more from the Iowa Department of Health and Human Services about increasing oversight of the programs to decrease the amount of denials.

“Anytime we expand the number of people who want to increase oversight is a day to celebrate,” Sand said. “A lot of us have been ready here for a long time.”

Sand says University of Iowa audit may not have been possible under new law

Sand’s powers were limited by Senate File 478, a bill passed in the 2023 legislative session, that now limits Sand’s powers to track taxpayer dollars and bars him from making an appeal.

Last winter, Sand’s office investigated a utilities deal made between the UI’s public/private partnership with ENGIE/Meridiam — the deal included the UI receiving $1.165 billion upfront in 2019 as a part of a 50-year agreement.

Sand cautioned government officials in December 2022 of future public-private partnership agreements following his investigation. The transaction has become one of the largest financial obligations held by Iowa taxpayers, according to his audit.

Under Senate File 478, however, the audit of the university may never have happened.

“We took the University of Iowa all the way to the Iowa Supreme Court,” Sand said. “The [university] withheld documents from us related to the utility claim. Under the old system, if someone didn’t give us the records we asked for, we could have an independent court decide if the auditor gets the records.”

Sand is uncertain his requests would currently move past the three-person arbitration panel, whose approval is required to access documents. The panel consists of Sand’s representative, a representative from the agency involved, and a tie-breaking vote appointed by Republican Gov. Kim Reynolds.

“The bill is comically corrupt,” he said.