Senator Julian Garrett

Senator Julian Garrett

(Des Moines) -- The Iowa Senate has given approval to a pilot program that would allow certain Medicaid members to participate in direct primary care agreements.

By a 28-17 vote, the Senate approved SF81, which instructs the Department of Human Services to develop a pilot program starting in 2022 that would allow childless adults and pregnant women to receive basic health care from a physician using a monthly fee system, versus a fee-for-service approach. Senator Julian Garrett -- a Republican from Indianola -- says direct primary care agreements allow patients to pay providers directly and cuts out the insurance process.

"The advantage to these agreements is that it eliminates a tremendous amount of paperwork and red tape," said Garrett.  "The patient just pays a monthly fee to the healthcare provider for their basic health care needs.  They need to make other provisions for the catastrophic examples such as cancer and things of that kind."

Under the pilot program, Medicaid recipients in the identified categories would be able to enter into an agreement with a provider with the state footing the bill.

"The state would pay the monthly fee for a number of Medicaid patients for the pilot," said Garrett.  "The state would have to continue to pay the big ticket items as they do now."

Garrett says the program will save the state and the managed care organizations that run Medicaid money. Democratic Senator Amanda Ragan of Mason City says the proposal will not save the state money, because all of the money for the agreements must be paid by the state, instead of using federal match funds under the traditional model.

"I'm not certain why you would think the Medicaid population would be the best fit for this," said Ragan.  "And it's duplicative, because you're going to still pay that fee -- that capitated rate -- for every one of those people that you have in that pilot.  That's not going to stop.  If you truly believe that managed care is the best thing since sliced bread, this bill says it isn't."

The non-partisan Legislative Services Agency says the financial impact of the bill cannot be determined until they know how many participants will be enrolled in the program and the cost of each direct care agreement. Current estimates place the monthly payment for each participant between $50 and $150 per month. The bill now heads to the House for consideration.

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