Legislative hearing to address problems with new $146 million Medicaid payment system

5839204_mFairbanks Rep. Pete Higgins, chair of the House Health and Social Services Committee, will be holding a hearing on Tuesday in response to complaints from the Medicaid provider community on why they aren’t getting paid.

The Alaska Department of Health and Social Services, which is in charge of Medicaid payments, upgraded its 25-year-old payment system in October. The new system is a Xerox product and is run by that company. It cost the state $146 million.

It was supposed to make things smoother, but it’s been so plagued with glitches that some providers are on the verge of going out of business because they haven’t been paid through the system.

Recently, State Health Care Service Director Margaret Brodi said that it still might be four to eight weeks before the system is completely functional.

Ruth Babcock runs three assisted living programs in Homer, which serve a total of about 15 clients, most of whom are on Medicaid. One of the homes didn’t get any payments for several months. After she contacted her state representatives and wrote a letter to Gov. Sean Parnell, payments began to trickle in, slowly. She said it’s still “nip and tuck” however.

The state still owes the company about $50,000. “Our elders deserve better than this,” Babcock said.

A dentist who declined to go on the record said that he, too, was having issues with the payments until he contacted a state representative. Now, he’s begun getting paid through the system for some, but not for all of the services for which he is owed.

On Jan. 24, KTUU reported that an assisted living facility in Palmer was owed $750,000. The facility’s funds are almost completely drained.

Babcock said that even if and when the system is fully functional, she’ll never be paid back for the lost time that she and her workers have spent on trying to get payments. On Monday morning, for instance, she spent 30 minutes on the phone with DHSS and as of noon, still hadn’t received paperwork she needs to fill out for a claim. There have been times when she’s been kept on hold for up to an hour.

The old system worked just fine, she said.

On Friday, DHSS had a teleconference with the Alaska dentists to discuss the new system. Rep. Higgins, who’s chairing the legislative hearing on Tuesday, is a dentist. The Alaska dentists have a strong PAC in the state.

Babcock and other providers have not been invited to such a meeting.

The hearing is at 3 p.m. You can watch it live on Gavel to Gavel.

Contact Amanda Coyne at amandamcoyne@yahoo.com


12 thoughts on “Legislative hearing to address problems with new $146 million Medicaid payment system

  1. a medicaid provider

    Congratulations Commissioner Streur.
    You have solidly placed yourself in the dubious position of doing more harm to the Alaska health care community than any Health and Social Services commissioner since statehood. Your managerial incompetence has hurt small and large businesses from Barrow to Ketchikan. Your arrogant disregard to the state’s team of private sector health care providers is unparalleled. Your response to the problems associated with the computer glitches have been uncaring and unsympathetic. The fact that you still have a job speaks legions about the fact that Governor Parnell must be asleep at the wheel. Your behavior will catch up to you someday.

  2. IH8DHSS

    The alaska department of health and social services and their computer vendor are the most disingenuous and dishonest people I have ever dealt with. They lie to the public and destroy private sector businesses. You wouldn’t expect this from a republican administration. Why the Governor allows this is disappoionting and beyond comprehension.

  3. Ellen T.

    I was told that Gov. Parnel would do something to fix the Department of Health and Social Services. He hasn’t done anything except to turn a blind eye and allow them to continue to run afoul of caring about the e needy. The staff there are awful. The worst I have ever dealt with. Parnel’s Commissionmer of DHSS is Ivan the Terrible as far as I’m concerned.

  4. Amy

    A co-worker forwarded me the link to this site. Thank you for writing about this horrible travesty that the Department threw at us. The Commissioner isn’t interested in helping us, he’s only interested in himself. Why only the dentists get a conference to be heard and get a special explanation ? Do the rest of the provider community don’t matter ? He’s only taking care of the dentists because Rep Higgins is a dentist and he is simply trying to calm down that industry group to mitigate Higgins. That’s wrong and shows he doesn’t care about others, just himself. DHSS Commissionmer and his staff are rude and uncaring. DHSS needs an overhaul and some peopo be inserted there that understands that public service means just that. I wish Gover Parnell and his assistant Mead Treadwell would help us. Doesn’t the buck ultimayely stop at their desks ?

  5. Maria SantaLucia

    I too own a Assisted living home in Alaska. I too am owed thousands of dollars for services I have already rendered. I would like to charge the state interest for all this money they are holding ,due to their errors. How many of you go to work every day knowing you’re not going to be paid ?this is due to errors in a system of billing? Really? Ihave spent countless hours on the phone just yesterday while on speakerphone With my bookkeeper present in the room, We overheard the worker on the other line say to another xerox worker “Can we shoot them” . I was amazed to hear this to think that they feel inconvenienced by us! Mind you this is not our errors. So I ask myself why am I still in this business. It’s not for the money -Obviously. My motive for my business is the people. I love my elders and I want to take care of them, My heart is for people… I take care of the elderly, But evidently that means I have to also become a fighter of the system In place so that I can continue in this care. My hope is that someone reading this that is a natural fighter instead of a caretaker will come forward to help. Please see the need that we have for everyone to be involved , To correct this terrible problem. I was told yesterday that they understand that their problem is their problem Regarding my claims not being paid. That’s nice, xerox I’m glad you understand. Please just pay me for the work I have already done. Let me pay my staff and run my business without debts and loans , High interest rates… due to you holding my money. Congressman people of high importance in this state please make a note you will be old someday ,you will want to live with someone who cares! I want to stay in business please help!

  6. Jenny

    Amanda, why don’t you do a story about how DHSS has proposed regs laying out there that will triple the payments to the facilities they run and lower the rates paid to private sector operators. That’s how out of control DHSS and Governor Parnell and his Chief of Staff Michael Nizic do nothing about it. Their snd inaction make them complicit. The Commissioner is out of control, hateful and down right mean-spirited.

  7. Ruth Babcock

    This is such a goat-rope. If the State intended to run us all out of business, I’m sure this is just how they would go about it. Between lowering our daily rate and increasing their rate for State-run assisted living homes to nearly triple what we get, delaying prior authorization numbers for many months, delaying payments for many months, requiring hugely expensive audits every year, provided by us, and ramping up the government “oversight” (micro-management) of our privately owned businesses, I don’t believe they could be any more effective at destroying our industry. If they cared anything at all for the population they are supposedly serving, they would support the care providers who serve and protect our vulnerable adults.

  8. D-Forever

    This is comedic. The administration that was so critical of the problems with the Obama Care website – – a new site built from the ground up mind you not just a new system. At least Obama communicated with the public and they sat a date that it would work and it did. Reading the comments here it sounds like their is considerable frustration. The fix : elect a governor with the courage to fire incompetent crats. This is a huge and important department. Way to important to allow it to remain in the hands of those currently running it. Hey, Governor Parnell – Choose respect. Talk is cheap. Take real action and get some new leadership at the department that stands to help the lee and the needy (Like you care. Guess that’ll never happen_). As long as the commissioner contributes to your campaign ne pass the test. Shameful. Parnell either isn’t paying attention or just doesn’t care. Like Isay, shameful!

  9. Going Crazy

    I keep the books for a local doctor that handles medicaid patients. The Department of Health’s computer problems has kept us from being paid for months. This is totally unacceptable and unfair. Yet, the attitude from the senior management of the Department acts like they could care less. I’v voted for the republican candidate for governor every year that I have voted for the past 25 years. This year will be different as I plan to vote for Byron Malott. At least that way we’ll have a new person at the helm of the Department of Health. VOTE BYRON MALLOTT. VOTE FOR CHANGE AT THE DEPARTMENT OF HEALTH.

  10. JT

    I’ve been hearing about this problem from one of my neighbors in the assisted living home business. Being a tech analyst, I realize and understand how problems with new systems can be problematic. What I don’t understand nor comprehend is why the department chose to transition to the new system without first testing and running dual systems until all the bugs were worked out. To me, it sounds like no one was watching Xerox and they took a short cut or three because no one at the state was managing the contract. In the private sector, heads would roll.

  11. Dantal Practice Accountant

    Thank you for writing this article. DHSS is a mess. Dealing with the department has been a nightmare. Not only is their system broken so is their attitude when it comes to dealing with the public. I recognize that the computer failures are not the fault of DHSS; however, I submit that their lack of managing the contract is. No competent professional would walk away from an operational system without first knowing that the new system had been tested and operational. Also, I feel that the department has been arrogant, rude and insensitive in dealing with their vendors. Only government, and I would submit bad governm$ent management, would handle this situation so poorly. Maybe Governor Parnell should get some new leadership in the department that understands the meaning of public service. DHSS leadership has added insult to injury. I am exremely provoked with DHSS and also with the fact that Governor Parnell has done anything to show that he is any different than those uncaring people that incompetently run the department. This is a huge black eye for the administration.

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