Healthcare providers will likely go weeks without Medicaid payments

May 15, 2018

South Peninsula Hospital.
Credit Photo Courtesy of South Peninsula Hospital

Healthcare providers may go a few weeks without Medicaid reimbursements. After it became clear that Medicaid funding will run dry about a month short of the new fiscal year, the Legislature included some funding to pay for Medicaid services until July 1 as it passed the capital budget over the weekend. 

"The Medicaid Program required a $48 million supplemental to continue paying bills through the end of the fiscal year, which is June 30," Becky Hultberg said, CEO of the Alaska State Hospital and Nursing Home Association. "The legislature approved $28 million of that necessary supplemental, leaving the program about $20 million short.

The Alaska Office of Management and Budget estimates that the Medicaid program will run out of money around June 10. Hultberg said there may be a couple of routes the Alaska Department of Health and Social Services may take when it does.

"In past years, the department suspended payments to providers who could best manage a cash flow disruption, and we expect that is likely the process the department will begin sometime in June," she said. 

There's also a chance DHSS could cover the gap. Hultberg said that would be akin to looking in the couch cushions for change, but it’s too early to tell if the department may be able to find the funds.

South Peninsula Behavioral Health Services CEO Jay Bechtol said the news is a mixed bag.

“It’s like Christmas when you get socks,” he said. “You’re like oh great, it’s a present, yay! You open it, it’s socks. Twenty-eight million dollars is better than nothing, but it leaves a $20 million shortfall for the providers in the state of healthcare, which hurts.”

If behavioral health does experience a gap in funding, Bechtol said it will still provide services through June, but he adds that if Medicaid funding continues to fall short in future years, some providers may stray from expanding services.

“We don’t want to spend on long term programming if the state is going to be out of money again and then we are going to have to go for three months instead of three weeks without any kind of funding," he said. “It really does impact us long term and the services we need to be able to provide to the community.”

That may be an issue next year. Legislators also budgeted $30 million less than what Gov. Bill Walker requested.