Temporary win, health care providers

Health providers won a round against Gov. Mike Dunleavy’s effort to use emergency powers to cut state Medicaid payments. A settlement in lawsuit brought against the state administration by the Alaska State Hospital and Nursing Home Association, or ASHNHA would restore cuts in payments ordered this spring and provide for retroactive payments. However, the state is proceeding under normal regulatory procedures to enact a permanent cut in payments. Dunleavy had proposed the reductions last spring in his budget and the inability to make the reductions until the regulatory procedure is completed will create a shortfall in the Medicaid budget that the Legislature will have to fill through a supplemental appropriation.

The payment reduction can likely be absorbed by larger hospitals but community hospitals and nursing homes are vulnerable. Many nursing homes serve a high percentage of Medicaid recipients.