Editor's note: This story has been changed to correct the title of Central Peninsula Hospital Director of External Affairs and Marketing Bruce Richards.
The Alaska Department of Health and Social Services will delay paying some Medicaid claims until the next fiscal year begins on July 1.
In a Tuesday letter to the state’s Medicaid-accepting healthcare providers, DHSS director Margaret Brodie wrote that her department would be unable to pay them immediately for treatment provided to some Medicaid patients because it is “challenged by a tight budget situation” and would “temporarily pend some Medicaid claims while Medicaid funds are reallocated among accounts.”
DHSS Deputy Director for Health Care Service Lori Campbell said her department will decide weekly which claims to suspend and which to pay. Medicaid claims are usually paid or denied in a weekly cycle, which Campbell said “starts at noon on Monday and is typically not finalized until late Wednesday, early Thursday.” During each weekly cycle, a financial team in DHSS will now choose which claims will be processed based on how dependent on Medicaid the provider is.
“We would look to providers that rely on the weekly Medicaid payment cycle the most,” Campbell said. “...They would be providers who provide direct care to recipients and for whom a weekly payment cycle is vital to the operation of the business.”
On average, DHSS decides 135,000 claims and distributes $32.5 million in Medicaid money each week. This week it will pay out $24.6 million, Campbell said.
The suspended claims will be paid or denied after the new fiscal year begins with a new state budget on July 1.
In the current budget, Campbell said that DHSS received around $1.7 billion in Medicaid funding from state and federal sources, which she said was a usual amount. Although the number of claims has increased after Alaska expanded Medicaid coverage to adults with annual income below 138 percent of the federal poverty level, the expansion population is entirely funded with federal money and wasn’t affected by funding it received from the state.
“We’re pretty steady this year,” Campbell said. “... We haven’t seen any unexpected spikes in claims.”
Rather, the lack of funds that led to the suspended Medicaid claims came from the lack of a normally-available state funding source. As DHSS approaches the limits of its budget at the end of the fiscal year, it is usually able to request additional money from the legislature. This year, no money is available to fill the need.
“We can’t request supplemental budgets to help with this situation because there’s just no money,” Campbell said. “We could request a supplemental, but there wouldn’t be any money to give us.”
Central Peninsula Hospital External Affairs and Marketing Director Bruce Richards said he didn’t foresee the suspended payments “impacting us directly, unless it was for a really long time where we weren’t getting paid.”
“Bigger providers are able to survive that a lot better, but some of the smaller providers who depend on that monthly revenue stream for the services they’ve already provided, that’s who it’s going to be tough on,” Richards said.
Other local health care providers hadn’t returned requests for comments before press time.
Reach Ben Boettger at firstname.lastname@example.org.