Alaska House Finance Committee says it won't advance Medicaid expansion

JUNEAU -- While legislators remain deadlocked on budget negotiations, debate continues on another topic of Gov. Bill Walker's special session call: Medicaid expansion.

Republican legislative leaders appear unwilling to back down on the issue of expansion -- one of Walker's campaign promises -- as demonstrated by legislative action and inaction this week.

The action comes in the House of Representatives, where after a week of contentious hearings, the Republican-led Finance Committee announced Thursday it would not be moving forward with the expansion proposal.

In those meetings, the committee discussed how accepting $140 million in federal dollars to expand Medicaid to 20,000 to 40,000 Alaskans could be bad for the state.

The main subject this week: the Medicaid Management Information System responsible for paying providers' bills, which the Republicans called "broken."

"With our current system, we cannot ensure Alaskans can enroll or providers can count on getting paid," said Rep. Steve Thompson, R-Fairbanks, co-chair of the committee.

He then said the committee would not approve Medicaid expansion and would hold no more hearings, and adjourned without giving Democrats an opportunity to speak.


Gov. Walker said he was "disappointed" in the lack of action.

The Rev. Julia Seymour said she and other expansion advocates would continue to try to persuade legislators. Seymour is pastor of Lutheran Church of Hope and a member of Anchorage Faith & Action Congregations Together, which has been advocating for Medicaid expansion since 2013.

"I hold true to my profession as clergy -- nothing is over, resurrection is always possible, God brings life out of death," she said.

The inaction came in the Senate, where no hearings at all have been held on Medicaid expansion during the special session and few meetings of any kind of have been held.

But Senate Majority Leader John Coghill, R-North Pole, said work is being done behind the scenes on the potential costs and savings from Medicaid expansion and associated reforms, and senators are working with the Walker administration on those numbers.

"Once we get those lined up you'll probably see us having a hearing on that part of it," Coghill said of the Senate.

The House hearings this week looked at the problems the new MMIS system has had since it began operation in October 2013. Flaws in the complex Medicaid billing system developed by Xerox were repeatedly brought up by Thompson and other expansion opponents.

The previous Parnell administration sued Xerox nearly a year after the system went live, seeking to force improvements and recoup costs.

The Alaska Department of Law told the committee the lawsuit seemed to persuade Xerox to make fixing the Alaska system a priority, and it now is working.

The committee's Republicans grilled Health and Social Services Commissioner Val Davidson and her staff, accusing them of giving conflicting answers now and in a February lawsuit deposition.

Davidson acknowledged the answers differed, but said that was because the system wasn't working at the time, but is now working. It should not be a hindrance to expanding Medicaid, she said.

Rep. Dan Saddler, R-Eagle River, questioned Davidson's assertions.

"You are claiming that all of the problems, most of the problems, have been fixed -- it's all better," he said.

But he said he wasn't confident enough in that to expand Medicaid and add more people into the system.

"We need to be able to trust this system if you are proposing to build a third story on top of a shaky foundation," he said.

In the Senate, opponents also cited the February deposition from Division of Health Care Services Director Margaret Brodie to support their position.

"I read the deposition from the director, and it shows just how deep the problem really lies, as far as repairing the system that's already in place, let alone adding a new layer of complexity to it," Coghill said.


Seymour said she doubted legislators had only just discovered the issues with MMIS.

"I don't feel confident that a committee that had 30 meetings (on Medicaid) expansion but is now saying they learned the final reasons they would not pass it this week had any intention of ever passing it," she said.

At Thursday's meeting, which lasted just a matter of minutes, Thompson spoke as if speaking for the whole committee when he said it had decided against passing House Bill 148, Walker's expansion and reform bill.

"At this time, the House Finance Committee is not comfortable with advancing HB 148," Thompson said.

The committee took no public vote or discussion about a vote during the week.

Thompson then adjourned Thursday's brief meeting as Rep. Les Gara, D-Anchorage, an expansion proponent, was trying to speak.

In an interview later, Gara questioned how the decision not to go forward with Walker's bill was made and whether Thompson was speaking for the Finance Committee or just the Republicans on the committee.

"I wasn't at the meeting when they made the decision -- if there was a meeting," he said.


Gara said the main concern expressed during the days of hearings, about the MMIS system and its ability to accept additional claims should Medicaid be expanded, has been addressed by the Department of Health and Social Services and the Department of Law.

"The flaws they talk about simply don't exist," he said.

But Finance Committee member Rep. Lynn Gattis, R-Wasilla, told Davidson this week that she still didn't believe the MMIS system was fixed. She said she heard concerns as recently as this week from providers about problems.

"What I heard was the system still has glitches that are really not ready to go forward," she said.

Leaders of the House and Senate majority caucuses, both controlled by Republican expansion opponents, said that even if Walker's expansion proposal would pass on the floor, they would not bring it to the floor unless a majority of their caucuses supported it as well.

Tuesday, House Speaker Mike Chenault declined to say whether that was still in force, but said that the immediate challenge facing Medicaid expansion in the House was that it didn't have enough votes to pass out of the Finance Committee.