Alaska has violated state and federal law by failing to process Medicaid applications in a timely manner, according to an Anchorage-based civil rights law firm that settled a class-action lawsuit in federal court with the state three years ago.
The Alaska Department of Health’s figures this week showed that there are 8,987 outstanding Medicaid recertifications and applications to be processed by the state Division of Public Assistance, which is contending with a major backlog in application processing that officials attributed to a staffing shortage and other issues.
“This number includes new applications, recertifications, and duplicates for all Medicaid categories,” Dr. Anne Zink, the state’s chief medical officer, said by email Wednesday.
She said that health officials believe the majority of those cases are recertifications, meaning that many can be processed automatically and that “the individual will not lose coverage while the case is being reviewed.”
In 2019, Jennifer Spencer, then a social work student at the University of Alaska Anchorage, filed a class-action lawsuit against the state on behalf of herself and thousands of Alaskans who had not had their claims processed on time.
Spencer had applied for Medicaid in December of 2018 but was still waiting for an eligibility determination to be made two months later when the suit was filed, Alaska Public Media reported in 2019.
State Medicaid law requires that claims be processed within 30 days, and federal law has a 45-day deadline. For disability claims, an eligibility determination must be made within 90 days under both state and federal law.
In August of 2019, the state of Alaska settled with Spencer and agreed to pay her attorneys’ fees at the Northern Justice Project, an Anchorage civil rights law firm. The settlement stipulated that by the end of 2020, the state would process at least 92% of Medicaid applications in a timely manner and issue regular updates on the progress it was making.
By January 2021, a report showed some improvement: 76.7% of applications were processed in November 2020 by the federal deadlines and 58.4% were meeting the stricter state rules.
But then the Department of Health’s figures from December 2022 showed a backslide — since last July, 54% of initial applications were processed on time. The current average wait time for Medicaid applications to be processed is between 90 and 120 days, state health officials said.
“It’s just incredible, to be honest with you, 50% of the time they’re complying with the law, jeepers creepers,” said James Davis Jr., an attorney with the Northern Justice Project.
Zink said the reasons for the current Medicaid application backlog are multifaceted: There had been a plan in 2021 to reduce staffing through attrition, move away from paper applications and use a more automated processing approach. A cyberattack later that year hit the state health department and crippled its IT systems, Zink said, which scuttled that plan and created long-term challenges.
The health department — which oversees the Division of Public Assistance — faced difficulties during the COVID-19 pandemic, including anticipating staffing needs, according to Zink. Recruitment has posed another challenge.
Davis isn’t convinced. A large backlog of Medicaid applications, and long processing times, predated the pandemic and the cyberattack.
In 2015, the year that then-Gov. Bill Walker expanded Medicaid eligibility, the state was processing 42.6% of applications on time.
In February of 2019, when the class-action lawsuit was filed, court documents stated there was a 15,000-person Medicaid backlog and 10,000 low-income Alaskans had been waiting for coverage since filing for assistance in 2018.
Many of the reasons Zink gave for the Medicaid backlog also extend to the Division of Public Assistance’s severe backlog in processing applications for the Supplemental Nutritional Assistance Program, often known as food stamps. SNAP benefits for thousands of Alaskans have been delayed for months, without a clear timeline for when they can expect relief.
Addressing the current backlog of applications to the Division of Public Assistance is a top priority, Zink said. The department filled 10 vacant positions to support processing and customer service in October. It is recruiting for 30 permanent positions and another 45 long-term non-permanent positions, she added.
“The benefit of these additional staff should be felt by staff and Alaskans in weeks not years,” Zink said.
Davis is focused on what he calls the Health Department’s continued failures. He said his law firm held off on challenging its “abysmal” Medicaid processing rates because attorneys believed a judge would be loath to punish a state agency for misconduct during the height of the COVID-19 pandemic.
Now, though, the pandemic is firmly in the rearview mirror, Davis said, meaning the law firm is preparing next week to argue that the state of Alaska is continuing to violate state and federal law.
“It’s déjà vu all over again,” Davis said.
Patty Sullivan, a spokesperson for the Alaska Department of Law, said by email that state attorneys could not respond to the Northern Justice Project’s allegations because they don’t know the specifics of what is being alleged. Sullivan said the terms of the settlement should be clarified.
“The 2019 settlement required the Division of Public Assistance to make a substantial percentage of Medicaid decisions within certain timelines by the end of 2020, which it did,” she said. “(The Department of) Law will continue to support the Division as needs arise with processing applications on a reasonable timeline.”