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Behavioral health providers seek $13.7M bridge funding as Medicaid rates lag costs
Summary
Advocates for Alaska behavioral health providers told the committee a $13.7 million increment is necessary to bridge provider shortfalls while the state updates Medicaid rate methodology, arguing current reimbursement does not cover service delivery.
The Alaska Behavioral Health Association and provider representatives urged the House Finance Committee to retain a $13,700,000 increment included by the subcommittee to shore up behavioral health providers while the Department of Health completes a rate methodology update.
Lance Johnson, chief operating officer of the Alaska Behavioral Health Association, said providers face chronic underpayment and service closures because Medicaid rates have not been rebased as intended. "We heard from ORR last year that their modeled rate does not cover the cost of delivering services by about 16% at least," Johnson said, referencing prior presentations on rate modeling.
Johnson said the increment would provide bridge funding to augment clinic and rehabilitation rates while the Department of Health conducts a study to establish sustainable, long-term reimbursement. He warned that providers cannot wait two years for rate changes and pointed to recent closures and reduced services, including youth residential crisis beds.
The committee recorded testimony as part of the mental health and operating budget hearings (HB 55 and HB 53). Advocates asked lawmakers to keep the increment in the final budget so providers can remain operational while a durable rate solution is implemented.
