AK: Medicaid’s Delayed Payments Continue to Frustrate Providers

Alaska’s health care providers that serve Medicaid beneficiaries say they are frustrated with a new claims processing system that has been plagued with glitches, creating a huge backlog of unpaid claims.

Alaska’s Medicaid program switched to a new claims processing system called the Medicaid Management Information System (MMIS) in October 2013.  The contract for the system was awarded to Xerox in 2007, and the system was supposed to be ready to go live in 2010, but implementation was delayed by three years.

Once the new system was up and running last fall, problems emerged.

Alaska’s Medicaid program pays roughly $26 million each week for services for about 140,000 Alaskans.  But during the first few weeks after MMIS went live, the program was paying only $10 million to $14 million each week. Medicaid is now trying to catch up on payments.

The problems with the new claims processing system were discussed during a Feb. 4 hearing of the House Health and Social Services Committee.

Committee Chairman Pete Higgins, R-Chena Ridge, who is also a dentist, said that his own practice has “felt the bite” from the delayed Medicaid payments.

“We’ve seen the Obamacare rollout, and by any [measure] this rollout made that rollout look good,” he said.

Several committee members said they had heard from providers in their community that the delays have caused serious financial hardships. They also heard about problems in testimony from providers during the hearing.

Karen Perdue, president and CEO of the Alaska State Hospital and Nursing Home Association, said the organization surveyed its 30 members in late January and found that they reported a total of about $198 million in back payments owed by Medicaid.  “Some facilities are doing fine”–in terms of cash flow, Perdue said.  “Some are really not.”

Lisa Smith, acting executive director of Choices, Inc., which provides outpatient rehabilitation services for adults, said her organization has gone through its entire reserves while waiting for its Medicaid claims to be processed.

Cheryl Campbell, a speech language pathologist in Anchorage, said she is owed $13,000 for just two clients.

MeLane Harbor, executive director of Primrose Retirement Community in Wasilla, said Primrose hit a point when it was owed more than $300,000.

Xerox officials told the committee they are working hard to resolve the problems. “We do believe we are making progress,” said David Hamilton, head of government healthcare solutions at Xerox.

Xerox implemented the MMIS first in New Hampshire.  Alaska is the second state where MMIS has gone live.  Next up is North Dakota.

In Alaska, the system cost $32 million to implement.  The federal government will pay 90 percent. Xerox is still owed about $25 million for its work on the system.  “I’m just not paying them until it’s right,” Health and Social Services Commissioner William Streuer told the committee.