State juggles Medicaid payments to stretch out funding

  • By Larry Persily
  • Saturday, May 26, 2018 9:06pm
  • News

The state will juggle payments to health care providers for the next five weeks, delaying some payments and stretching out its limited Medicaid funding until more money is available at the start of the new state fiscal year on July 1.

Most of the burden of delayed payments will fall on the state’s larger health care providers, such as Providence Alaska Medical Center in Anchorage, Bartlett Regional Hospital in Juneau, Fairbanks Memorial Hospital and Central Peninsula Hospital in Soldotna.

“The current pending or delay of Medicaid payments to Central Peninsula Hospital is unfortunate. It won’t cause us any cash-flow problems, but it may for other providers,” said Bruce Richards, the government and external affairs manager at Central Peninsula Hospital.

Alaska legislators adjourned May 12 without approving $20 million requested by the Alaska Department of Health and Social Services to fully cover Medicaid payments through the end of the fiscal year on June 30. The department will use next year’s money to cover that gap after July 1.

“Using next year’s budget to pay for current-year expenses will leave a hole in the fiscal 2019 budget the legislature will most likely need to address next session,” Richards said.

The Republican-led Senate Majority believes the Medicaid program spends too much and declined to fund the full request. The Senate “sent a message to the department that overutilization is an issue,” Sen. Peter Micciche, R-Soldotna, was quoted in the May 14 Juneau Empire.

A long-term answer may be more limits on who can qualify for Medicaid, Micciche told the newspaper. The Senate approved a bill requiring Medicaid recipients to work or volunteer to quality for benefits, but the bill did not receive a hearing in the House.

The federal government provides most of the funding for the income-based Medicaid program — more than 70 percent of the cost in Alaska. The program provides health coverage for low-income people, families and children, pregnant women, the elderly and people with disabilities.

State officials met with the board of directors of the Alaska State Hospital and Nursing Home Association on May 16 to deliver the news that several million dollars in Medicaid payments would be suspended starting May 18.

The association passed along the news to its members, with advice to contact the state if the delayed payments will be a problem. The question for members, said Becky Hultberg, president of the statewide organization, is: “Can you manage cash flow for six weeks?”

The state Department of Health and Social Services generally processes and issues Medicaid payments in less than 10 days, sending out checks every week, said Jon Sherwood, deputy commissioner.

Federal law requires that states process and pay a majority of Medicaid claims within 30 days of receipt, Sherwood said. Alaska will juggle payments to stay within the federal requirement, delaying payments into July that will not exceed the 30-day rule.

The state will catch up on all pending payments when fiscal year 2019 funding becomes available.

“It has happened before that we have not been able to pay all our claims,” many times over the past 20 years, Sherwood said.

The projected total cost this year for Medicaid in Alaska is about $2.4 billion, with $1.7 billion in federal dollars and about $690 million from the state treasury, said Shawnda O’Brien, assistant commissioner at the Department of Health and Social Services.

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