Chaos in health care: Dunleavy creates Medicaid 'emergency'

In one of its first steps to cut health care for poor people, the Dunleavy administration invented an emergency that it claimed was sufficient reason for doing away with the public process on regulations to cut Medicaid payments to many health care providers by about 7 percent.

Superior Court Judge Jennifer Henderson said Aug. 30 that she was likely to temporarily stop the emergency regulations because there was no real emergency, as defined in state law.

We have a different kind of emergency in Medicaid, one created by the Dunleavy administration through inadequate planning and sloppy execution by the governor and the state health department—behavior that has become standard state practice.

The state and the Alaska State Hospital and Nursing Home Association told the Anchorage judge Wednesday that they have reached a tentative settlement on the case of the rushed regulations. Details are pending.

The hospital association says that the simultaneous appearance of the Dunleavy Medicaid vetoes June 28 and the emergency regulations is the best evidence that “this underfunding is an occurrence entirely of the Dunleavy administration’s own deliberate creation.”

There are two other examples so far of inadequate Medicaid planning and execution by the governor’s budget office and the health department.

One is the mishandling of the veto of adult dental Medicaid services. The governor announced that dental services had ended July 1, but the service is continuing until Sept. 30, though the state concealed the reason for the extension—the failure to follow long-established Medicaid rules.

A second example is the belated search for a “senior advisor and strategist” from Outside to act as a miracle worker. This week the state said it has tentatively selected the Public Consulting Group to provide advice on how to cut health care for poor people in Alaska by $230 million or more.

(PCG recently did a recent report for the state on Medicaid, one in which it said that it may not save money to move Alaskans from Medicaid to private insurance. “Alaska should consider the prospect that a private option may increase costs for the state,” the company said on the last page.)

It is likely that $230 million will not be cut from Medicaid this year because there is no plan, which means the governor will have to seek a large supplemental appropriation in early 2020 from the Legislature to fill the hole.

Overall, the governor has said he wants to cut state and federal Medicaid spending by more than $700 million over a couple of years, but he has been unable to define the level of reduced services that idea would require or which Alaska health care institutions might survive the bloodletting.

On July 8, the Dunleavy administration said it was looking for a part-time expert to assist in creating “a global roadmap that redesigns the Medicaid and public assistance system at a lower cost.”

PCG, the likely recipient of the contract, is to have someone on its staff put in 850 hours over the next year at about $295 an hour, identifying budget cuts for the fiscal year that began July 1. At least that was the original plan in July.

When one of the firms competing for this contract asked what advance work has been done to prepare for an overhaul, the answer was that nothing has been done. The thrust of the July 8 announcement was that “it will be necessary to implement additional cost-saving initiatives to meet the FY2020 budget target.”

It wasn’t until July 22 that the state posted an amendment to the request for proposals that admitted the July 8 announcement about fiscal year 2020 cuts was impossible.

“The state does seek additional savings options for FY2020 and would welcome options to that effect. However, due to time constraints, the complicated nature of Medicaid, and other factors such as needing stakeholder input on proposed changes to the state’s Medicaid plan, the state understands any savings options presented by the consultant may not be realized until FY2021. Savings options should definitely be presented that are achievable in FY2021 as well as FY2022 and beyond,” the state said on July 22, contradicting the terms of the original proposal.

There are 217,000 Alaskans on Medicaid and thousands of health care providers who deserve a level of stability and coherent planning from Dunleavy, but they aren’t getting it.