New Medicaid director fields questions on privatization, health program plans

The newly hired official tasked with running Montana’s Medicaid program got a grilling on Wednesday in his first public appearance before lawmakers, some of whom expressed concerns about the state potentially privatizing the system that handles health coverage for hundreds of thousands of low-income Montanans.

Montana is one of 11 states with an entirely government-run Medicaid system, which helps administer a range of healthcare benefits to more than 280,000 Montana adults and children. After a brief, tumultuous experience in the 1990s with what a 2008 legislative report called a “problem-plagued managed care contract,” the state has operated under a fee-for-service model in which providers are reimbursed for services they administer to patients who are covered by Medicaid.

Mike Randol, who previously oversaw Medicaid programs in Iowa and Kansas and started with the Montana Department of Public Health and Human Service in late May, told lawmakers on an interim health budget committee that his background in managed care is not necessarily a forecast for Montana’s Medicaid future.

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Montana hires a medicaid director with a managed-care past

Montana’s new state Medicaid director, Mike Randol, started this week at the Montana Department of Public Health and Human Services. Randol oversaw privatized Medicaid systems in Iowa and in Kansas, and he has been a staunch advocate of managed care. Montana is one of just 11 states that has not privatized at least part of…

by Katheryn Houghton, KFF Health News and Tony Leys, Kaiser Health News 06.01.202206.01.2022

“I have not had conversations with anyone relative to transitioning Montana to managed care,” Randol said in response to a question from Rep. Mary Caferro, D-Helena. “The only conversations I’ve had relative to managed care is sharing with [DPHHS] Director [Adam] Meier during my interview process my experience with managed care, as well as my experience with the fee-for-service.”

Republican and Democratic lawmakers returned to the topic of managed care several times over the course of Randol’s introduction to the committee, which lasted roughly twenty minutes. 

“I’ve gotten so many calls on this because people are very worried about Montana moving to privatization of our Medicaid program,” Caferro told Randol. Whether his plan includes managed care or not, she said, “what are your first steps and priorities for Montana’s Medicaid program?”

“My first priority for the program is to ensure we continue providing the services,” Randol replied, referencing provider shortages and geographic challenges that often make it hard for Montanans to access health care. “I’ve never been to Montana before, but it’s an extremely frontier, rural state, I can see.”

Senator Bob Keenan, R-Bigfork, also posed questions about Randol’s philosophy on managed care and what “opportunities” the new director might see “for managed care versus fee for service.” 

“It really is unique for each state,” Randol said. “If you’ve seen one Medicaid program, you’ve seen one Medicaid program … And it really is incumbent upon the state to determine what works best for that population. How can you provide those services to those vulnerable members in your Medicaid program? And that’s ultimately what we need to do.”

Since the state expanded adult Medicaid in 2015 under the Affordable Care Act, the number of uninsured people in Montana has dropped by more than 35%. Advocates often cite that statistic as an indication of the program’s importance for Montana residents under the current model. In contrast, many advocates still have a bad taste in their mouth left over from the state’s experience with managed care in the 1990s.

“On the managed care discussion, I would just say, as everyone across the state knows, it doesn’t give us a warm, fuzzy feeling,” said Mary Windecker, executive director of the Behavioral Health Alliance of Montana, during Wednesday’s meeting with lawmakers. “I’m not a fan of managed care and privatization at all.”

But Windecker and other providers also say the state’s current fee-for-service model, specifically reimbursement rates that fail to cover the cost of providing services, hinder the development of a robust network of health care professionals who opt to serve Medicaid patients. Meier, the state health department’s director, underscored that point on Wednesday to emphasize the fallibility of both funding models. 

“We’re in fee-for-service right now and I have providers banging down my door who are unhappy with rates,” Meier said. The success of a managed care program, he added, comes down to the fine-print details in contracts with the outside companies.

At other points in Wednesday’s meeting, Meier acknowledged that Montana’s current reimbursement rates are inadequate for retaining health care providers who serve Medicaid patients. Citing takeaways from an ongoing study of provider rates, Meier said it would cost Montana roughly $31.5 million to bring rates up to benchmark standards seen in other states, nearly a quarter more than what the state is currently spending on reimbursement. 

Randol told lawmakers that continuing to focus on the provider rate study is among his top priorities in the coming months. He also pointed to the anticipated end to the federal government’s COVID-19 pandemic public health emergency, which will allow states to remove ineligible people from their Medicaid programs for the first time since early 2020.

“We want to make sure that those that are eligible remain eligible and on the program, but those that are not, that we go through the redetermination process and ensure that we only keep those that are eligible,” Randol said.

The interim budget committee is scheduled to meet again in September. Another interim committee that oversees policies relating to DPHHS, the Children, Families, Health and Human Services Interim Committee, is scheduled to meet on June 27. According to the preliminary agenda, Randol is not scheduled to reappear.