Hospital group sues to block emergency Medicaid payment cut

The Alaska State Hospital and Nursing Home Association has sued the state Department of Health and Social Services. It’s seeking to block emergency rule changes that cut the rates that Medicaid pays many hospitals and doctors.

Becky Hultberg, the association’s president, said changes should be handled through the normal process for changing rules. That would allow for the public to comment on changes before they’re adopted.

“At a time when the state is making pretty significant decisions that could impact people’s lives, or livelihoods, or health care, we think it is important to ensure an opportunity for public input before decisions are made,” Hultberg said.

The state published the emergency rule changescutting provider rates by 5% and blocking an annual inflation increase on June 28. That’s the same day Gov. Mike Dunleavy issued 182 line-item vetoes to the state budget, including one reducing Medicaid spending. The changes went into effect three days later, the first day of the new state budget’s fiscal year.

Hultberg said that’s too fast.

“They issued a regulation on a Friday to take effect on a Monday,” she said. “When you’re looking essentially at providers who have a payroll to meet, businesses to run and patients to see — taking a pay cut over a weekend, we don’t think that’s reasonable. In this case, there was ample opportunity for the department to go through the regulatory process, had they chosen to do it.”

The association filed the lawsuit on July 11. It’s asking the Anchorage Superior Court to expedite its review of the case, and to put the rule changes on hold.

A state Department of Health and Social Services spokesperson said the department doesn’t comment on ongoing litigation.