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DES MOINES — Gov. Terry Branstad on Monday defended the state’s switch to privately managed care for Iowa’s Medicaid recipients, saying the new system is saving “significant” money by rooting out fraud and abuse that previously was going undetected.

Branstad did not provide specific data documenting his claim but pointed to experiences in other states that have adopted similar managed care models and noted state budget expectations Iowa would save more than $100 million this fiscal year with three private managed care organizations overseeing Medicaid services for 560,000 Iowans.

“We’re getting good reports,” the governor told reporters at his weekly news conference. “The reports that we’re getting is that this new system of managed care, replacing the unmanaged care that we had before, is stopping significant fraud and abuse that had occurred previously in our state and across the country, and it is designed to try to improve health outcomes.”

Under the old state-run approach, Branstad said it was more difficult to detect unnecessary or redundant medical services being delivered by doctors, hospitals and other health care providers who were treated Medicaid patients. The new verification system employed by state-contracted MCOs is making payments on a capitated basis rather than procedures performed since the April 1 switch was made, he added.

The governor downplayed reports of Iowa providers not getting paid in a timely fashion or paid at all and recipients being denied services, saying complaints have been resolved by MCOs and state Department of Human Services overseers with many instances involving people not following the program rules or meeting the verification requirements.

Branstad did acknowledge an Associated Press report that state sanctions and late-payment fines were waived for the three MCOs in April and May while Iowa’s system transitioned to the private management — a decision that has drawn some legislative criticism. He said the leeway was granted as part of a collaborative effort to transition to a new approach.

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Statehouse reporter for The Courier

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