DES MOINES, Iowa (AP) — A district court judge has dismissed a lawsuit challenging privatization of the Iowa Medicaid program filed by a group representing hospitals across the state.
The Iowa Hospital Association sued in November 2015 seeking to reverse Gov. Terry Branstad’s plan to privatize the Medicaid program claiming it violated state law because it diverted money hospitals have historically been paid to the three health care corporations the state hired.
The state contends the hospitals will continue to be paid.
By law about $34 million a year is paid into a trust fund by the hospitals and matched by federal funds. It’s used to reimburse hospitals providing Medicaid services.
Judge Robert Hanson says if the hospitals don’t get the money, they can sue for financial damages.
He concluded state law allows managed care.