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Alaska Health Department outlines Medicaid rate review, demonstration projects and system modernization
Summary
The Department of Health told the Senate Health & Social Services Committee it is reviewing Medicaid payment methods, pursuing federal demonstrations, and modernizing claims and enrollment systems to improve access and program stability.
Commissioner Heidi Hedberg and Deputy Commissioner Emily Ricci told the Senate Health and Social Services Committee on Jan. 23 that the Department of Health is pursuing a multi-pronged effort to modernize Medicaid payment and operations.
The department has launched a Medicaid rate methodology review — focused first on behavioral health, long‑term care, federally qualified health centers and medical transportation — with recommendations due in July 2025, Ricci said. The study will examine (1) what cost elements go into rates, (2) whether rates cover providers’ costs, and (3) the policies that govern payment (for example, billing increments versus monthly or capitated payments). Ricci said the process includes provider and stakeholder engagement.
Nut graf: The review is part of a broader “transformation of care” arc that also includes pursuing Medicaid demonstration projects and school‑based services, and committing departmental resources to speed technical and operational improvements. The stated goal is to align payment and delivery with health outcomes while stabilizing the provider workforce and improving access.
Details and context: Ricci described an Office of Health Savings inside the commissioner’s office that has secured nearly $4 million in federal grants to plan and support pilots and demonstrations. Ricci said the department will pursue demonstration projects that can test alternative benefit designs and payment approaches; she thanked the Legislature for prior legislation enabling that work.
School‑based services were highlighted as a demonstration area. Ricci said the department was awarded a roughly $2.5 million Centers for Medicare & Medicaid Services grant and is working with a contractor experienced in both school‑district and Medicaid administration to pilot billing and service models inside schools.
Operations and timeline: The Department reported a recent major operational transition — behavioral health claims were moved into the state’s standard Medicaid claims system on Nov. 1, 2024. The department said roughly $300 million in claims covering nearly 15,000 providers have processed through that system and that stabilization work is ongoing.
Medicaid eligibility redeterminations remain in progress but the department said it is in the “tail end” of that effort; about 17,000 outstanding cases were noted with processing expected to continue into March (2025). Ricci said the department is continuing to build provider supports, a provider‑enrollment portal (in the governor’s capital budget), a patient mobile app that will initially carry Medicaid ID cards, and modular system upgrades rather than wholesale replacements.
Quotes: "The rate methodology study will look at rate structure, rate level and rate policy," Deputy Commissioner Emily Ricci said. "We have been working closely with providers and stakeholder groups that are impacted by this throughout the process."
Ending: The department said the rate review’s preliminary recommendations are due in July 2025 and that the work will proceed alongside reporting and renewal activities tied to existing Medicaid demonstration waivers.
