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.

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