OTTUMWA — There’s a financial philosophy that says private business can handle a job more efficiently than government. There are plenty of examples showing such successes. But a local nonprofit is suffering in a way they hadn’t under Iowa’s Department of Human Services.
Tenco Industries supports residents who have developmental disabilities. They can get training, practice working a job with staff right next to them or housing where they will have a level of independence. But serving 300 disabled people requires a large staff of health and vocational assistance workers. Housing requires staff on-duty 24 hours, plus other health care needs as well as the cost of housing.
“Medicaid under Iowa DHS would deny, maybe 10 percent of our client’s claims,” said Dr. Kent Walker, a physician and Tenco board member.
As a doctor, he knows not every claim is going to be paid by insurance. But handing the job of paying for services to a “managed care” business is destroying the 50-year-old charitable organization.
“We handed in our December batch of claims,” said Walker. “Only half have been processed. And 90 percent have been denied.”
He said the management team, including Tenco Chief Financial Officer Marc Roe, really know what they’re doing. To have 90 percent of their health costs paid, as was occurring under Gov. Terry Branstad and his successor, Gov. Kim Reynolds, was working. There are grants and donations and a board that has kept Tenco debt very low. Under state government, the Medicaid program was working.
Walker said now, the state gave that Medicaid money to private companies and told them to take over the job of reviewing claims and making payments. As a physician, Walker said he's used to insurance companies denying or delaying payment, but not like this.
Tenco's director said she believes the main problem is the managed care company is set up to pay for medical expenses: sprained ankle, sore throat, car accident.
"They follow a medical payment model. They're not set up to pay [services for the] developmentally disabled," said Cheryl Plank.
There’s an easy example Plank uses to show the differences between services for a developmentally disabled adult and someone who, for example, has a broken foot: The patient with the broken foot gets treated, goes to physical therapy and gets better. Once they improve, the insurance provider doesn’t send any additional funding. They’re cured.
For an adult with an intellectual disability they want "treated," services may allow them to grow: to communicate better, be more independent and feel more confident. Yet a traditional insurance provider sees that a program worked, so they immediately pull funding: The medical model says the “patient” who improved is, after all,“cured,” right?
"It has increased the amount of back-office work our people do," Plank said. "What we really need is for people to encourage our legislators that takes disability services out of managed care."
Calling the health care company did not seem to help, Walker said.
"There’s always been volatility in funding," said Plank, "but this is the first time in my 30-year career that I firmly feel the funder does not have any compassion about the work we’re doing ... they are messing with people’s lives."
With hundreds of thousands of dollars in bills, Walker said the agency is quickly approaching emergency status.
“We’re going to do some financing," said Walker. "We have to borrow immediately. The [managed care company] accepted a contract to ‘take this money and care for these people in a timely fashion’. It’s a completely new ball game. It’s unsustainable.”
One thing they may have on their side: friends in high places.
“We jumped into this [managed care plan] too quickly,” Reynolds told the Courier during an interview this weekend, “and now we’re paying the price.”
She said while she can see there are flaws, she’s not about to completely abandon the managed care program.
“I can’t go backwards,” she said. “But we can fix what we have.”
While the governor spoke to Tenco board members Saturday, she said she understands the time constraints.
“Governor Reynolds assured us her staff is on this. She gave our executive director her private cell number to text her,” Walker said.
And they’re able to reach their local elected officials, too, including, Walker said, one who was there Saturday.
“Senator Mark Chelgren has been a big supporter of Tenco,” Walker said, “and we’ve appreciated his support.”
Plank said Chelgren, a Republican, wants to help, though he doesn't necessarily like a proposed bill in its current form. The executive director was told the senator is actually working on drafting something. For the nonprofit organization’s part, they’ll be attempting to get that emergency loan this week.
“We’ve got to do something now to keep the doors open,” said Walker.
But, he added, it sounds like Reynolds isn’t waiting, either.
“During the governor’s visit, she told our executive director, Cheryl Plank, that work would begin on digging into the problem starting Monday.”
Plank confirmed Monday she received a call from a health care policy specialist in the governor's office.
EDITED: To clarify that the managed-care plan was implemented without a vote.
Reporter Mark Newman is at mnewman@OttumwaCourier.com or on Twitter @CourierMark.