Three managed care companies who contracted with the state of Iowa to provide Medicaid services have suffered losses of around $450 million over the past year. In February, the Iowa Department of Human Services signed contract amendments which will shift some of those losses to the state for payment. According to a DHS spokeswoman, the agreements will cost the state roughly $10 million, and the federal government will contribute some funds as well.
The heavy losses experienced last year are likely to have a significant impact on current negotiations between the state and the managed care companies, with the companies seeking sharp increases. This could exacerbate the state’s current budget concerns, which is already operating within a tight margin.