State backs out of Wellpath deal
The state Department of Health and Social Services cancelled a long-term contract with Wellpath, a Tennessee-based firm, to manage the Alaska Psychiatric Institute, the state-owned acute care mental health hospital. Wellpath has been working under a short-term emergency contract but was given a long-term contract to manage the facility without going through a competitive bid process, which is required by law. Also, the state failed to conduct an analysis, required under its bargaining agreement with workers, to demonstrate that privatization will save money. That prompted the Alaska State Employees Association Local 52, which represents API workers, to file suit. The state administration was also embarrassed when word leaked out the Providence Health Systems, an experienced mental health provider, had expressed interest managing API before the state’s DH&SS let the long-term contract to Wellpath.

Legislators criticized the long-term contract award because the health department had not informed the state procurement officer, who must approve sole-source bids, that there was another operator potentially interested and that Wellpath and its predecessor companies have experienced problems in its contract management of facilities in the Lower 48. The DH&SS has now let a consultant contract to conduct the required study of privatization savings. The award went to Public Consulting Group, Inc. The same firm did an earlier study of privatizing API, finding no savings. Legislators will be watching closely because this time the client, the state administration, is in support of privatization.

Medicaid changes being planned?
Health providers are carefully watching signals from confidential talks between state and federal officials over a reorganized Medicaid program for Alaska. Gov. Mike Dunleavy told President Donald Trump the state would be open to federal “block grants” as a way to give the state flexibility in man- aging Medicaid, and in seeking cost reductions. Federal officials have been urging states to try block grants as an alternative to the current system under which the state and federal governments pay for health care on a modified (reduced) fee-for-service program. Health providers are resisting block grants arguing that they would conflict with exist- ing law and would lead to reduced funding. Medicaid provides health coverage for lower-income Alaskans. Currently about one fourth of Alaskans are covered by Medicaid, the bulk of them children.

Fairbanks gas utility hits bumps
The Fairbanks-based Interior Energy Utility is on schedule with its expansion, which includes a large liquefied natural gas storage tank in Fairbanks now nearing completion and a second, smaller LNG tank in North Pole and an expansion of a small LNG plant near Point MacKenzie, in the Matanuska-Susitna Borough. But there are speed bumps, including an $11.8 million cost increase for the large LNG tank and a need to raise $15 million in financing. The Fairbanks North Star Borough is working on a plan to loan IGU $7.5 million.

Kenai plant to import LNG?
Andeavor, owner of the idled Kenai LNG plant and the Kenai refinery, has asked federal permission for minor modifications to the plant to allow offloading and and storage of imported LNG