The state is running short on money for Medicaid. Until the next fiscal year starts in July, hospitals and other health-care providers won’t get paid for treating much of Alaska’s low-income population. But the state is trying to funnel what money is left to hospitals that could otherwise shut down.
The state is $20 million short of what it needs to make Medicaid payments until July 1st. Some healthcare providers are getting paid, some aren’t.
“We’re prioritizing those smaller providers, people that are the sole providers in their community, that heavily rely on Medicaid,” said Shawnda O’Brien of the Department of Health and Social Services. “We know that if we aren’t able to pay them they would have to shut their doors, and we certainly don’t want that to happen.”
Wrangell Medical Center checks off those boxes. It’s the only hospital in the island town. Most of its revenue comes from Medicaid. And it already has a hard time paying its own bills.
“We have less than 30 days cash on hand and that’s being very generous,” said Aaron Angerman, the hospital’s development coordinator. “Usually the numbers are floating around 9 to 15 days of cash at hand, meaning if all the money stopped coming in, and we still had to pay payroll and pay the expenses, benefits, things like that just to keep the lights on, that’s how long we could survive without getting more payments coming in.”
Other rural hospitals like Petersburg Medical Center, PeaceHealth Ketchikan Medical Center, Sitka Community Hospital are being prioritized as well.
The state will assess every week where it can and cannot pay, based on need. This can keep small, struggling hospitals afloat for the next month. But the money is still going to run out, most likely in mid-June.
Once July hits, everyone will take a breather. But the folks at Wrangell Medical Center know the struggle doesn’t end in July.
“As you can see at last year’s numbers we didn’t have enough. Come next year we’re going to have the same issue,” Angerman said.
Claims filed in June will be paid from next year’s budget, which is already funded $30 million less than the governor requested.
“That’s the scary part to me is it’s going to look the same next year, if not worse,” Angerman said.