FAQ: Iowa’s Medicaid Directed Payment Program

What you need to know:

In 2016, the federal Centers for Medicare and Medicaid Services issued rules allowing states to direct Medicaid managed care organizations to provide supplemental payments for advancing state health care priorities. These payments are known as Medicaid state directed payments.

Iowa’s Medicaid managed care directed payment program has had a positive impact on the state’s hospitals and the people and communities they serve. Prior to the program, Iowa’s hospitals hadn’t had a Medicaid rate increase since 2013, and 60% were operating with negative margins.

Today, less than 28% of Iowa hospitals have negative operating margins, financially fragile service lines like maternal and behavioral health are beginning to stabilize, and hospitals have resources to invest in their workforce.

This funding must be preserved to sustain access to care for Iowans and ensure the financial viability of our hospitals, particularly those in rural areas of the state.