Alaska News

Anchorage judge questions ‘emergency’ used to allow Medicaid rate cuts

An Anchorage Superior Court Judge has ruled that the Alaska Department of Health and Social Services may have falsely conjured an “emergency” to push through cuts to Medicaid payments the department is now being sued over.

The Alaska State Hospital and Nursing Home Association sued the state in July, saying that the DHSS unlawfully declared an emergency to cut Medicaid payments to healthcare providers by up to 7 percent.

The emergency regulation went into effect July 1.

The order by Judge Jennifer Henderson, released Friday, found that the lawsuit by the hospital association raised “at the very least, serious and substantial questions regarding DHSS’ finding of emergency.”

“The judge’s order is encouraging,” said Becky Hultberg, president of the Alaska State Hospital and Nursing Home Association. “She seems to agree that the situation was not an emergency justifying the use of emergency regulations.”

In late June, DHSS Commissioner Adam Crum, an appointee of Gov. Mike Dunleavy, issued a finding of emergency that allowed it to almost immediately institute the rate cuts while circumventing some of the lengthy public input process usually required.

The emergency, the state said, was that the Dunleavy administration’s 2020 fiscal budget “significantly underfunded” the Medicaid program.

But that was no emergency -- or surprise -- to the state, Henderson wrote in the order: DHSS had known about and even planned for the reductions at least six months in advance.

“The state budget and DHSS’ response to it have none of the hallmarks of an actual emergency,” she wrote.

Henderson did not rule on the health care association’s request for a preliminary injunction that would force the state to retroactively pay providers at the higher rate.

The order asked for more briefing on other legal issues raised by the case, due by Sept. 6.

A spokesman with the Department of Health and Social Services did not immediately respond to a request for comment Monday, Labor Day.

The order: