Iowa’s Newest Medicaid Insurer Rents Palatial Office Space

Why is Iowa Total Care, the state’s newest Medicaid insurer, renting the most expensive office space in metro Des Moines? Not only will their new West Des Moines Westfield Campus offices be the most expensive in the metro, they will be paying 37.5% higher rent than the average in greater Des Moines.

Their offices in the Jordan Creek development are rated as the 42nd highest rental in the country according to JLL an international realty research company. The Westfield Campus includes heated underground parking, a food truck court, a rooftop patio, a coffee bar and an amphitheater.

Iowa Total Care’s costs after paying taxes, operating costs and common area maintenance will push monthly rent to the $30 per square foot range. JLL listed the average area office space in greater Des Moines at $18.38 per square foot in 2018.

“Westfield is at the top of the market now,” said Eric Land, a local research analyst at JLL.

Keep in mind, this insurance company will be joining the other two insurers that administer Medicaid health care for 680,000 poor and disabled Iowans. Iowa Total Care is replacing AmeriHealth Caritas which bailed on Iowa because it said it was losing too much money.

Why is the Iowa DHS, Governor Reynolds and Republican legislators silent as we reward this private-for-profit insurance company with Iowans’ hard earned taxpayer dollars to pay for extravagant and wasteful office expense? Wasn’t the premise for moving Medicaid from successfully-run state control to for-profit-private companies to save Iowa taxpayers money?

Considering the privatization disaster for Iowa Medicaid recipients and providers, this company appears to be far more interested in sumptuous office space than concern for Iowa’s most vulnerable residents.

Iowa legislative Democrats are continuing to criticize Reynolds’ privatization scheme.

“It’s disappointing because there are so many other rental properties at far less costs,” said Sen. Pam Jochum, D-Dubuque. “The money should really be going into the services of people they are hired to serve.”

Governor Reynolds was asked about the company’s lavish new offices. She refused to directly answer about Iowa Total Care’s over-the-top new digs.

“I’m not going to get caught up in the other details,” Reynolds said.

The skepticism for Iowa Total Care doesn’t end with their choice of opulent office space. This is the same company that was rejected in 2015 because they failed to adequately score on the Department of Human Services evaluation at the time. Yet, Iowa Total Care was awarded the contract in April 2018 to replace AmeriHealth Caritas, even though Iowa Total Care’s rating fell 14 points below their 2015 failing score.

Iowa Total Care is a subsidiary of Centene which has a very checkered history as a Medicaid administrator in other states. They have racked up nearly $24 million in penalties in a dozen states over claims of mismanagement. Over 300 sanctions against Centene and its subsidiaries since 2013 have resulted in fines and penalties. The sanctions have ranged from non-compliance with federal or state Medicaid contracts or rules, failure to promptly pay medical claims and inadequate access to doctors.

Former Governor Branstad’s decision to move Medicaid administration from the state to for-profit private companies has subjected Iowa’s Medicaid recipients to an unending litany of cuts in services, claims denied and frustrating changes. Likewise, heath care providers have suffered losses, late payments and rejected claims.

It certainly appears the new Iowa Total Care is more concerned with having the most luxurious office space rather than saving money or providing essential services to Iowa’s Medicaid population.  It also appears Reynolds is going to ignore this glaring waste of Iowa’s taxpayer money.


by Rick Smith
Posted 2/19/19

3 Comments on "Iowa’s Newest Medicaid Insurer Rents Palatial Office Space"

  • Just another scammer company taking advantage of people in need . The idiots that support this scam need to be voted out of office and this system returned to state control and proper oversight !

  • Iowa Total Care should have rented space for their new office in downtown Des Moines where there are many insurance companies located for decades or in an old Younkers store in central Iowa. But it looks like they already want to waste money so they can raise their administrative fees and gouge the State of Iowa by choosing the most expensive area for office space in the metro. What about Cedar Rapids or Iowa City or Ames for office space?
    Does anyone in our state legislature ever check out these companies before awarding million-
    dollar contracts? This decision should be a matter of public record and it should be investigated
    quickly to see if the contract can be voided. Iowans are sick and tired of being ripped off and this money would be better spent by paying the medical providers an increased fee for their services. Maybe more doctors would start to accept Medicaid patients if they were actually paid a decent fee. It would be better for everyone except the insurance companies.

  • This is the response that I received from my state senator about this issue:
    “By federal law, an insurance company has to expend at minimum 85% of premiums collected on actual reimbursement of care.
    DHS indicates to me and in public forum that they require 88% but in actuality, the administrative fees for the MCO’s have been 5-6%.
    So in answer to your question, I am not worried about how Iowa Total Care spends the 6% of administrative fees it retains. ”

    My thought is that Iowa Total Care is sending the wrong message to tax payers and to their poor and disabled clients by spending so lavishly on its office space.

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