Alaska’s Current Medicaid Program Fraught With Waste and May Take Your PFD to Fix it

Current Medicaid payment processing system is broken. And it may just take your PFD to breathe life back into it. How does that make you feel Alaskans?

It’s just money so why should we worry?  In case you haven’t seen it, the sworn affidavit of Margaret Brodie, program director of Medicaid in Alaska’s DHSS, has astounding facts regarding the broken current Medicaid system.  For those who believe this is a partisan problem, most of this occurred during the Parnell Administration in the Department.  The cavalier attitude of those managing this program is simply astounding and unbelievable.  It seems to them, that it is just money so why worry.

money thrown in the air

The waste of your dollars has been going on for many years since the new Enterprise (Xerox) system was put on-line in October 2013.  During those many months, what have the people responsible for helping our current Medicaid eligible patients and managing our money been doing? At the end of the workday do they just say, “It’s just a few million dollars here or there, see you tomorrow”, as they leave to go home?  Where is the accountability? Does anyone really care? It’s your PFD and the government will use it to patch over its problems.

Now the facts are out in the sworn affidavit and here is a summary of the most glaring problems in Alaska’s Medicaid program:

  • Alaska may owe the federal government anywhere from $72 million to more than $144 million as a penalty for a very high payment error (PERM) rate.  “We are expecting to have to pay back to the federal government substantial sums.”.

  • “Xerox’s defective testing, failure to fully implement Enterprise, and failure to cure has caused the state to suffer devastating harm that is difficult to quantify.” (emphasis added).

  • System does not price claims correctly.

  • System inappropriately denies claims (some are outstanding for a year).

  • System fails to pay certain categories of claims.

  • System is unable to process many claims.

  • System pays wrong provider.

  • System says claims are paid but does not identify provider so claims are not really paid.

  • “There has not been a single instance where the claims have balanced correctly under Enterprise.”

  • Providers have been unable to obtain service authorizations to provide services to patients for travel, waiver, hospital stays, durable medical equipment orthotics, and behavioral health services thus impacting both providers and patients.

  • The federal government has dropped its reimbursement rate from 75% to 50% for the administration of the new system. Effect: Alaska has already paid back $2,909,314 to the federal government.

  • The state of Alaska has made $164,633,356.00 in erroneous advance payments to providers. Of this, the state has collected back $60,476,117. The remaining $104,157,239 “will likely never be fully recovered due to crossing fiscal years…” It’s just your money, so why care?

  • Alaska has had to pay back the federal government $78,653,426 which was taken out of the 2014 General Fund.

This list above is not the worst of it. The added costs of maintaining the new Enterprise system will go into the out years forever and will be millions of dollars each and every year. Here is a quote from the same affidavit:

“…the State will end up having to pay development costs in the millions of dollars because many items that are typically configurable in an MMIS, were hard coded by Xerox into the core… But because they were built into the core and not in relational tables, the State has to pay for the coding changes and programmers ours in the core.  The cost to the State for these items being will be millions of dollars per year.”

If you would like to read the entire affidavit, here it is: Medicaid Affidavit of Margaret Brodie

Fix the current Medicaid program to ensure patients get proper care, providers are paid on time, and Alaskans do not lose their Permanent Fund Dividends.

The grand total for this Medicaid fiasco for Alaska is more than $326 MILLION-with an acceptable DHSS rounding error.

And for the mainstream media: Where is the outrage?