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Medicaid proposal draws criticism

Staff Report
Alabama Political Reporter

The chairman of the House Ways and Means General Fund committee thinks the state could reduce Medicaid costs by putting the Alabama Medicaid Agency in the hands of a private firm.

The proposal has drawn criticism from physicians’ groups and an advocacy group for low-income Alabamians, both of which say there’s nothing left to cut in Medicaid except essential care.

Rep. Jim Barton, R-Mobile, said Thursday he has reached out to three companies — including Missouri-based Centene and Virginia-based Amerigroup — about the possibility of managing Medicaid.

The $1.7 billion General Fund, which provides state funding for the agency, could see an estimated $400 million shortfall in next year’s budget. Medicaid makes up about 18 percent of the General Fund, and its share of the Fund is expected to grow significantly in the next few years.

Barton said he wanted to see better management of Medicaid resources and felt that a privately run company would best do that.

“I’m a private-sector guy,” Barton said. “I think the private sector nine out of 10 times can do a better job than an agency. That’s who I am.”

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Managed care companies generally seek savings by attempting to reduce utilization of unnecessary services. Centene and Amerigroup have been aggressive in winning Medicaid management contracts around the country in the past year. Both companies received contracts worth up to $1 billion from Texas in August, and last week scored contracts to run Washington state’s Medicaid Agency.

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