State mistake triggers Medicaid repayments from providers

Speech pathologist Carma Shay will have to find a way to reimburse the Alaska Department of Health and Social Services an estimated $8,000 in Medicaid payments the state said it paid in error.

The state is seeking about $15 million in Medicaid funds that were paid in error to over 1,000 healthcare providers in the state.

“This is just horrible,” Shay said. “How are we supposed to continue to serve our clients when all of the sudden we’re being told, ‘You know what? We need to go back and make you pay back 10 percent?’”

Shay is the owner and sole provider of Take Home Speech, a Kenai speech pathology clinic focusing on speech and swallowing health in children. Shay said 90 percent of her clients use Medicaid and that she’s the only Medicaid speech therapy provider on the central peninsula that offers in-home care for her patients.

“It’s important for a child to feel comfortable, especially when I’m demanding they do something really hard, like talk when they can’t, so I like working where they are comfortable,” Shay said. “The clients really need these services, but they are unable to pay (without Medicaid).”

Medicaid is a public insurance available to children and adults who meet the income or health condition requirements. The funds for the program are appropriated by the Legislature each year. About 28 percent of Alaska’s population were on Medicaid as of May 2018, according to the Center for Medicare and Medicaid Services.

The state is still calculating the exact figures each provider owes, but Shay said she’s expecting to pay back around $8,000. The recoupments are based on services billed to Medicaid between October 2017 and the end of June when the Department of Health and Social Services realized it was paying too much.

In preparation for the fiscal year 2018 budget, the state reduced Medicaid rates by 10.3 percent as a cost-saving measure, said Jon Sherwood, deputy commissioner for Medicaid and health care policy for the department. However, the reduction, which was supposed to be implemented Oct. 1, 2017, wasn’t applied until June 11 of this year because of an administrative oversight, he said.

“We did not submit the work order required to implement it,” Sherwood said.

Since the oversight, Sherwood said the department has updated its policies and procedures to reiterate staff responsibilities. Sherwood also said that nothing like this, that he knows of, has happened before.

Now, the state is asking for the money back.

“We recognize this is going to potentially put a financial burden on our providers, and we deeply regret the oversight,” Sherwood said.

Providers were notified on June 29 about the recoupment, and Sherwood said the department will very soon be reaching out to providers by letter and phone call to update the amount owed and to discuss a plan for payment. There will be several ways providers can pay: either as a lump sum or through installments. Hardship waivers are also available upon request and approval.

Shay said she doesn’t have $8,000 saved up for this.

“If I knew this was coming I would have stashed some money away,” Shay said.

Central Peninsula Hospital in Soldotna is expecting to pay more, somewhere between $200,000 and $300,000, according to the hospital’s government and external affairs director, Bruce Richards.

“It was a surprise,” Richards said. “But I certainly understand how this happens. It’s not a make or break issue for the hospital.”

Both Shay and Richards said the recoupment or the rate adjustments won’t affect the number of Medicaid clients they take on in the future.

“For me personally, it’s definitely not going to stop me from providing services to the clients, because they need it,” Shay said. “These are usually clients that don’t have the financial ability to pay for it.”

However, the recoupment and the 10.3 percent readjustment that was implemented this summer is creating, what Shay calls, “a scary time” in her practice.

“It’s cut back on my time with the families,” Shay said. “I used to offer one-hour sessions, and now I just can’t do that anymore. I offer half-hour sessions. It’s kind of disappointing because I’m cutting back on the time I’m spending with clients, but all of my families have been really understanding.”

Reach Victoria Petersen at vpetersen@peninsulaclarion.com.

More in News

Jeff Dolifka and his children perform the ceremonial ribbon-cutting for the Boys and Girls Clubs of the Kenai Peninsula’s Royce and Melba Roberts Campus in Kenai, Alaska, on Saturday, May 17, 2025. (Jake Dye/Peninsula Clarion)
‘So proud of what we accomplished’

New Boys and Girls Clubs campus dedicated Saturday with a ribbon-cutting and donor recognition.

Gov. Mike Dunleavy speaks to reporters about his decision to veto an education funding bill earlier this session at the Alaska State Capitol on Thursday, April 17, 2025. He vetoed a second such bill on Monday. (Jasz Garrett / Juneau Empire file photo)
Dunleavy vetoes 2nd bill increasing education funding; override vote by legislators likely Tuesday

Bill passed by 48-11 vote — eight more than needed — but same count for override not certain.

Graduate Paxton McKnight speaks during the graduation ceremony at Cook Inlet Academy near Soldotna, Alaska, on Saturday, May 17, 2025. (Jake Dye/Peninsula Clarion)
Beginning a new season of their lives

Cook Inlet Academy graduates seven.

The wreckage of Smokey Bay Air plane N91025 is photographed after residents pulled it from the water before high tide on April 28, 2025, in Nanwalek, Alaska. (Photo courtesy of NTSB)
Preliminary report released on Nanwalek plane crash

The crash killed the pilot and one passenger and left the other passenger seriously injured.

Member Tom Tougas, far right, speaks during a meeting of the Kenai Peninsula Borough Tourism Industry Working Group in Soldotna, Alaska, on Wednesday, Dec. 18, 2024. (Jake Dye/Peninsula Clarion)
Tourism working group rejects bed tax, recommends seasonal sales tax adjustment

The document includes a section that says the borough could alternatively leave its tax structure exactly as it is.

The rescued sea otter pup looks at the camera in this undated picture, provided by the Alaska SeaLife Center. (Kaiti Grant/Alaska SeaLife Center)
Stranded otter pup rescued from Homer beach

She is estimated to be around 2 months old and was found alone by concerned beach walkers.

Kenai Peninsula College Director Cheryl Siemers speaks to graduates during the 55th commencement ceremony at Kachemak Bay Campus on Wednesday, May 7, 2025, in Homer, Alaska. (Delcenia Cosman/Homer News)
Kenai Peninsula College leadership sees temporary transitions

KPC Director Cheryl Siemers is serving as interim UAA chancellor, while former KBC director Reid Brewer fills in her role.

Ash-Lee Waddell (center) of Homer is one of six recipients of the 2025 First Lady’s Volunteer Award at the Governor’s Residence in Juneau, Alaska, on May 13, 2025. Photo courtesy of the Office of the Governor
First lady honors Alaska volunteers

Volunteers from Homer and Nikiski were recognized.

The front of the Kenai Police Department as seen on Dec. 10, 2019. (Photo by Brian Mazurek/Peninsula Clarion)
Update: Middle schooler reported missing found after 24-hour search

The student was seen leaving Kenai Middle School at around 10:30 a.m. Wednesday.

Most Read