Health care association and state settle emergency Medicaid payment cuts

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ANCHORAGE (KTUU) - The Alaska State Hospital and Nursing Home Association (ASHNHA) and the Department of Health and Social Services have settled an ongoing legal dispute over payment rates for Medicaid providers, after a court indicated that it would side with ASHNA.

As a settlement, the the Department of Health and Social Services will essentially reimburse the providers who lost out on money when the department issued emergency regulations on June 28, cutting payment to Medicaid providers by about 5%.

But in late August, a judge wrote that what Department of Health and Social Services considered an "emergency regulation" likely didn't meet legal muster because it had known that the rate increase was coming.

Now the two sides have settled to make up for those reduced payments since June 28.

"Essentially providers get the difference between what they should have gotten had the emergency regulations not gone into effect," explained Becky Hultberg, CEO of ASHNHA.

While the settlement will repay money to Medicaid providers, they are still experiencing rate cuts that began on Oct. 1. That's because the settlement only affected emergency regulations, not the permanent regulations in place as of the beginning of the month.

Hultberg said that the permanent payment cuts are something ASHNHA is not pleased with, but something separate from the settlement.

"We don't agree with cost reductions through the blunt instrument of provider rate cuts, but nevertheless, acknowledge in the settlement that these rate cuts were going into affect," she said.

Still, both sides said it was the best option in light of the circumstances and in order to avoid a protracted legal stand off.

"I think it accomplished our objective, which was to support a public process before a regulatory decision is made, and I think it accomplished the state's objective which was to enact a rate cut," said Hultberg.

Commissioner Adam Crum, Department of Health and Social Services echoed that in a release from the Department of Law.

“I think this is a fair result for both parties. Instead of spending more time in a court room, both sides sat down to see if there was a path forward. This settlement provides the process ASHNHA feels providers need, while also recognizing the current finances of the State.”

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