A new company is now handling Anchorage’s privatized COVID-19 testing. What changes does that bring?

A private company is now handling COVID-19 testing in Anchorage: Capstone Clinic, a Wasilla health care provider that’s evolved through the pandemic to become the state’s largest testing presence.

The shift to Capstone from Visit Healthcare, the municipal testing contractor since July 2020, came suddenly this week with little public notice.

The Anchorage Health Department shuttered the city’s busiest testing location at the Loussac Library on Wednesday — the same day Capstone opened a new site on C Street next to the Anchorage Neighborhood Health Center.

Municipal health officials say the city chose to privatize using Capstone to save money.

The testing contract with Visit has cost the city $34.2 million between July 2020 and this month, according to health department director Joe Gerace.

“The city is getting out of the city-funded testing business,” Gerace said during an interview Friday. “We’re allowing private capital operations to take over.”

Visit Healthcare was contracted by the municipality at $98 per test. Officials have said they paid those costs up front, then were compensated by the federal government, a process that could take months.

Various municipal officials and Assembly members have said the city hoped to reduce the cost of testing. The Bronson administration temporarily reduced testing in October after funding ran out before the Anchorage Assembly approved adding more than $2.6 million to resume the program through November.

COVID-19 testing will remain free of charge to everyone whether they have insurance or not, Capstone and municipal officials say.

The shift to Capstone shouldn’t make much difference to the public provided turnaround times and accessibility stay the same, according to state pharmacist Dr. Coleman Cutchins, COVID-19 testing lead for the Alaska Department of Health and Social Services.

Most test results around the state are coming back within 24 hours, including with either Visit Healthcare or Capstone, Cutchins said.

“There are standard processes involved,” he said. “It doesn’t matter as much who the contractor is or who’s operating it.”

Capstone, which operates multiple clinics in Mat-Su, also holds multimillion-dollar state contracts to conduct coronavirus testing at Alaska’s airports — including Ted Stevens Anchorage International Airport, Ketchikan and Juneau — as well as at the University of Alaska Anchorage.

The company also performs private testing around the state in communities including Wasilla, Kenai, Tok, Dillingham and Deadhorse at Prudhoe Bay.

Capstone used to send test samples out to commercial labs but has since expanded its Wasilla facility to process their own tests on-site to shorten turnaround time, company officials say.

As of Friday, Capstone was performing testing at two former Visit Healthcare Anchorage locations, plus a new traveler site at Alaska Park near the airport.

Capstone wasn’t “selected” over other companies to do the job, Gerace said Friday. “They just happened to be the person that was able to step in.”

He said the municipality started looking for testing alternatives in July “given Visit wouldn’t drop their rates” per test from $98 to the $65 that’s allowable for reimbursement by a federal program administered through the Health Resources & Services Administration.

Representatives of Visit Healthcare did not return a request for comment.

Capstone is operating as a private entity not under contract or otherwise connected to the municipal health department, company officials say.

“We have opened our new sites as a commercial operation,” Capstone manager Matt Jones said in an email. “There is no contract, oversight, or partnership with the Municipality and Capstone.”

Capstone, unlike Visit, bills medical insurance companies if patients have insurance, Jones said in an interview Friday. If they don’t, the company bills for reimbursement through the Health Resources & Services Administration.

“Whatever we get reimbursed for those, that’s what we accept,” he said. “There’s never any costs for those people that are out of pocket or don’t have insurance.”

The company already has $1.3 million in unreimbursed tests at their Anchorage sites, Gerace said. Capstone didn’t immediately respond to a request to confirm that information.

Along with the C Street location, the company is operating Visit Healthcare’s former Eagle River testing site and the Alaska Park location targeting travelers.

The Alaska Park site is necessary because Capstone’s in-airport testing location moved behind security, he said. State medical officer Dr. Anne Zink said this week that the airport site was attracting people with COVID-19 symptoms — “We don’t want this to be a superspreading event” — but higher traveler numbers this holiday season also led to the need for more space than the old location near baggage claim offered.

Visit Healthcare is still operating a testing site at Changepoint Church off Minnesota Drive in Anchorage, at least through mid-December. Jones said Capstone is still working on moving into that spot once they’re gone.

But Visit Healthcare’s location at Muldoon Community Assembly will close, he said. Capstone is “looking to move to Tikahtnu” but is still working through the leasing process.

Capstone, unlike Visit Healthcare, has to pay rent at its facilities because they’re a commercial venture rather than a municipal contractor, Jones said.

Another difference: Any decision that needs to be made about closing testing sites or reducing hours now comes down to Capstone rather than the municipality.

“There’s obviously a point where the testing numbers drop off to the point where it no longer becomes profitable,” Jones said, adding that decision becomes more problematic without a contract.

“With a contract you can always have the money coming in whether the testing is happening or not,” he said. “With (a private operator) it is a little more of a risk but we want to keep it going for the community and make sure that everybody is still protected.”

The shift comes as the face of testing is changing. Municipal, state and federal officials are working to make at-home rapid tests more available. The municipal health department, for example, has offered to distribute rapid tests to about a quarter of the more than 400 adult living facilities and care centers around Anchorage, spokesperson Robert McNeily said.

Travelers at the Anchorage airport can now receive take-home tests through a state pilot program. The Biden administration this week announced that private health insurance plans will soon reimburse people who buy over-the-counter, at-home rapid tests.

Cutchins noted that Alaskans “need to accept that testing isn’t going to look the same forever” and also that getting vaccinated against the virus decreases testing demand.

“As we get higher vaccination rates and as we get more options for rapid at-home testing ... we don’t have as much of a need for big drive-thru sites,” he said.