With Medicaid expansion now a fact, a reform bill moves in Alaska Legislature

JUNEAU — A state Senate committee on Wednesday unveiled a newly updated, wide-ranging bill to modernize Alaska's public Medicaid health care program, with lawmakers and top officials from Gov. Walker's administration endorsing the legislation.

"They spent a lot of time to come up with a really, really great product," Valerie Davidson, the state health commissioner, said in an interview.

The new bill comes after lawmakers and the Walker administration spent a year working on reforms to the $600 million Medicaid program, which consumes about 15 percent of the state's operating budget.

The new bill — a substitute version of Senate Bill 74, from Fairbanks Republican Pete Kelly — contains provisions of legislation previously offered by both Kelly and Walker's administration.

Among the bill's components:

• Enhancements to the state's powers to combat Medicaid fraud.

• Better data collection and stricter rules regarding the distribution of prescription drugs.


• A new reform program to provide more efficient care for Medicaid recipients. It's required to include 11 different pieces, like extra payments for successful health care providers, and penalties for failures like infections acquired in hospitals.

• A management system to push Medicaid patients to visit day-to-day health care providers instead of making expensive hospital emergency room visits.

• A feasibility study for privatizing the Alaska Pioneer Home system.

The bill includes some of the Medicaid reform recommendations that surfaced in a recent redesign proposal commissioned by the Walker administration. Davidson said she appreciated the flexibility offered to her department by the new Senate bill.

Sen. Anna MacKinnon, R-Eagle River, chaired the Senate's Medicaid subcommittee that produced the new bill after a dozen meetings this year. Her Republican-led Senate majority caucus clashed with Walker over the expansion of the Medicaid program to more low-income Alaskans last year, but MacKinnon said in an interview Wednesday that she and her colleagues had worked collaboratively with Walker's administration on reforms.

"We had committed to the governor we'd make it happen," she said. "We just needed time."

Davidson raised one concern about the bill: a provision that requires her department to hire a contractor to verify Medicaid applicants' eligibility based on their identity, income and assets.

She said her department is already working with an existing state contractor, Deloitte, on a verification system based on income and identity. But Deloitte also works on the state's Medicaid enrollment system.

The Senate's bill requires the contractor for the verification system to be different from the one that manages the enrollment, which the bill says is "to avoid a conflict of interest."

MacKinnon said that section of the bill was inserted based on a request by Kelly. A staff member for Kelly said he was unavailable for an interview Wednesday afternoon.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at natherz.substack.com