Opinion: State's Medicaid failures are hurting businesses

In April I challenged the Parnell administration to explain to the public the steps it has taken to fix Alaska’s Medicaid reimbursement system. This system compensates health care providers (i.e., hospitals, clinics, physicians, therapists, etc.) for the services they provide to the needy.

The Parnell administration has taken three years to develop its new reimbursement system which it finally brought online last October. Ironically as Governor Parnell railed against the implementation of the Affordable Care Act, his own system utterly failed. Providers went months without being paid. Others received payments that did not correspond to the bills they submitted, raising major accounting and accountability concerns.

I noted that “the failure of the state’s new Medicaid payment system has been a disaster not just for hospitals and large medical practices but for many self-employed Alaskans, including health care professionals who work with vulnerable children. Excuses and promises to do better are not enough. The governor’s office needs to publicly and strongly make it a priority to fix the problems.”

In February hearings, Health and Social Services Commissioner Bill Streur assured legislators that the backlog would soon be fixed. In the meantime, he encouraged providers to seek advance payments, noting at the time that his department had already advanced some $118 million. Many providers were nervous about doing so, and they worried they would be subject to later audits.

Their fears came true. In early May, the Parnell administration sent a demand letter to various providers to now repay those advance payments. These were advised to “send in payment for the full amount by May 31, 2014” or have the full amount recouped from claims processing. In short, because the state’s system didn’t work, health care providers weren’t getting reimbursed. The crisis was so great that the state advanced money, only to demand it back on short notice, even though the underlying system failure remains in place.

In the meantime, many health care providers are financially struggling because they have yet to be reimbursed for their services, some dating back to September, before the conversion to the state’s new system.

The Parnell administration’s treatment of providers is nothing short of scandalous. Many report that they have been subjected to unnecessary and burdensome resubmissions of paperwork that, in some instances (“the red form”) must be completed by hand. More than one provider has voiced to me the concern that any public criticism of the administration’s handling of this deplorable situation might result in a punitive audit. This is not the “business friendly” environment that Alaskans expect of their government.

Byron Mallott is a Democrat candidate for Governor of Alaska.