The state is asking medical providers to pay for a $15 million mistake.

As part of budget cuts last year, the state decided to cut its Medicaid payments to providers by 10 percent. The change went into effect in October, but it was never reflected in pay checks.

With the state already lagging behind in Medicaid payments, the Department of Health and Social Services is now asking providers to return some of the money they did get.

Some providers, however, say that money has already been spent. 

"The numbers that I've heard from the hospital and other practices, I don't know how they're going to be come up with that kind of money over a short period of time to be able to pay the state back," said Stanley Watkins, a cardiologist with the Alaska Heart Institute. 

Watkins worries the move, in addition to the 10 percent cut and compounding problems with payment, will discourage providers from accepting patients who rely on the Medicaid program for coverage. 

"Ultimately it always comes back to the patients," Watkins said. "There are a lot of patients who are Medicaid who have trouble finding primary care physicians in town, and seeking just getting basic services with Medicaid is difficult in Alaska. And this is just another reason that providers would say, 'I can't take care of Medicaid patients -- especially if not only are you not reimbursing adequately for the services provided, but if you're asking money back, you know eight months later, or a year later.' That's going to be the straw that breaks the camel's back."

DHSS estimates about 1,100 providers were overpaid -- in individual amounts ranging from hundreds to hundreds of thousands of dollars. For its part, the department says it will work with providers to come up with payment plans for returning the overpayments.

"This was an oversight on our part, as we move forward with numbers of cost-containment measures involving several divisions, we did not catch that the work order to change this rate schedule had already been submitted to our vendor who manages those payments for us," said DHSS Deputy Commissioner Jon Sherwood. 

Not all of the providers who owe money have been notified about just how much yet. Sherwood says DHSS is still working to calculate what providers owe, and hopes to notify all of them about the numbers by the end of the month.

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