The state of Alaska and the Alaska State Hospital and Nursing Home Association have agreed to settle a lawsuit. It’s an agreement that calls for reimbursing physicians fees from certain cuts, the two sides announced Wednesday.

According to the Department of Law, the payments relate to a period when the Department of Health and Social Services reduced Medicaid reimbursements under an emergency declaration.

ASHNHA called the emergency artificial and a way to accelerate 5% cuts to certain physicians and hospitals. The organization hired former Attorney General Jahna Lindemuth to sue the state.

“I think this is a fair result for both parties,” Adam Crum, commissioner of the Department of Health and Social Services, said in a prepared written statement. “Instead of spending more time in a court room, both sides sat down to see if there was a path forward. This settlement provides the process ASHNHA feels providers need, while also recognizing the current finances of the State."

The state can still move forward on permanent cuts to providers for care administered after Sept. 30.

“We appreciate the state’s good faith efforts to resolve this lawsuit,” ASHNHA CEO Becky Hultberg said in a prepared statement. “Because of the complexity of health care, it is important to ensure adequate public process when the state makes difficult decisions about health care coverage, access or reimbursement. This settlement recognizes the importance of that public process, while ultimately enacting the rate cut planned by the state.”

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