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Medicaid reform legislation passes, now goes to Governor Bentley

May 7, 2013

Medicaid reform legislation that would ultimately restructure the state’s health care delivery system for low-income citizens won approval in the Alabama Senate on April 25 and in the House on May 7 and now goes to the Governor for his signature. Senate Bill 340, sponsored by state Sen. Greg Reed, R-Jasper, was approved by the Senate 27-3. State Rep. Jim McClendon, R-Springville, sponsored similar legislation in the House.


The approved bill is based largely on the earlier recommendations of the Alabama Medicaid Advisory Commission which was appointed by Governor Robert Bentley to improve Medicaid’s financial stability while also providing high-quality patient care. The commission recommended in January that Alabama be divided into regions, and that a community-led network coordinate the health care of Medicaid patients in each region, with networks ultimately bearing the risks of contracting with Alabama to provide that care.


In its current form, the bill would open the door to locally controlled managed care, according to State Health Officer Dr. Don Williamson, who chaired the Medicaid Advisory Commission and is leading the Medicaid transformation effort. The Medicaid agency would have to draw regions by October 1, 2013, and regional care organizations would have to be ready to sign contracts no later than October 1, 2016.


It would let hospitals, doctors, and other Alabama health providers form groups called regional care organizations that could sign contracts to provide medical care to Medicaid beneficiaries on the state’s behalf in return for negotiated payments per beneficiary,” he said. “If a regional care organization could provide care that met Medicaid’s quality standards for less money than it was getting from Medicaid, it would make money. If it couldn’t, it would lose money.”

Dr. Williamson emphasized that each regional organization would have an incentive to oversee and improve patient care to reduce costs: A patient who isn’t readmitted to the hospital because she had regular follow-up checks with her doctor likely is a less-costly patient and a healthier person.

“Sen. Reed and Rep. McClendon have worked long hours, talking with other lawmakers and with dozens of people representing hospitals, doctors, civic coalitions, and other groups, in an effort to pass a law that would protect Medicaid patients, health-care providers, and Alabama taxpayers,” Dr. Williamson said.  “Senate Bill 340 will do that. I want to thank them and Governor Bentley for their leadership on this legislation. This legislation is the start of a journey which will result in Medicaid transformation in Alabama.”