While Pitching Expansion, Health Department Officials Cite Fixes To Payment System

The state’s troubled Medicaid payment system has seen improvements in recent months, according to Walker administration officials.

Health-care Services Director Margaret Brodie briefed legislators on the state’s progress with the system at a House Finance committee hearing on Monday. The update comes as Gov. Bill Walker has asked lawmakers to accept federal dollars to expand the state’s Medicaid program.

Out of the 500 defects found in the Xerox-built system, fewer than 100 remain. Brodie also said that claims were being processed with greater than 90 percent accuracy. She said the system is not perfect, but it is improving dramatically and can handle more claims.

“The amount of work that remains is still significant, yet from October 2014 to the present, we have made significant progress,” said Brodie.

Xerox’s Medicaid payment system has been plagued with issues since it went online in 2013. It denied or miscalculated many claims because of rounding errors, causing providers to “experience serious difficulties getting paid,” according to a Department of Health and Social Services report. The state responded by offering $165 million to providers in advance payments — $70 million of which has been recouped — and suing Xerox for damages.

The problems with the payment system have caused Republican lawmakers to describe Medicaid as “broken,” and a number have said they do not support expansion of the program until the system is reformed. Brodie’s presentation did not convince some Republican members of the House Finance committee that the system had been sufficiently repaired. Rep. Lance Pruitt, an Anchorage Republican, said he does not feel the improvements go far enough.

“We seem to be a little bit more comfortable that the same thing, at that point in time, we had an issue with,” said Pruitt.

The committee will continue to hold hearings on Medicaid throughout the week. Expansion of the program has been a major priority of the Walker administration.

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