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Managed Care for Medicaid is Question Before the State

By Brandon Moseley
Alabama Political Reporter

Governor Robert Bentley (R) announced a 10.6% proration to the General Fund Budget of the state of Alabama.  The state’s schools, colleges, and universities are not affected because their funding comes from the State’s Education Fund.  The General fund includes most state offices, the state Department of Agriculture, the state prison system, and Alabama Medicaid.  Medicaid is a state and federal partnership program created in the 1960s during the Lyndon B. Johnson Administration to provide healthcare for poor seniors, poor families, underprivileged children, and pregnant Mothers.  Currently the program is managed by the state of Alabama and it is the most expensive program in the Alabama General Fund and growing faster than state revenues.  According to Rep. Jim Barton (R) from Mobile, Chairman of the House Ways and Means Committee for the General Fund, the state has been approached by private corporations who claim that if the state will let them manage the healthcare for Alabama’s poor that they can save the state roughly $100 million a year.

State Representative Jim McClendon (R) from Springville is Chairman of the House Healthcare Committee.  Rep. McClendon gave an exclusive phone interview to ‘The Alabama Political Reporter’ about this situation.  He said that the state is still undecided about what to do with the private managed care proposals.  Rep. McClendon said that the state may try it as a state pilot program or they could implement it in some counties but not in the whole state or it is possible that they could implement a program statewide.  We asked Rep. McClendon if the state was considering selling exclusive rights to the entire Medicaid program to one managed care company.  Rep. McClendon said, “There will be at least two companies.”

Rep. McClendon said that there were questions about the corporations’ claims about the $100 million in savings.  “They say that they will not cut payments to the providers (doctors).”  Rep. McClendon said that the corporations claim that they can use managed care to decrease emergency room use and improve quality of outcome for the patients.  “No company has won over the providers (doctors). The Providers do not like the concept.”

Dr. Pippa Abston is one of those Alabama Medicaid providers who are not in favor of the idea.  She graciously agreed to an exclusive phone interview with ‘The Alabama Political Reporter’ about her concerns.

Dr. Abston said that Alabama Medicaid had no fat to cut.  According to Dr. Abston, the program currently runs with 97% efficiency (a 3% overhead) and according to her research none of the states where this has been tried have achieved more than 85% efficiency.  Dr. Abston said that more money will go to corporate bureaucracies and profits instead of to pay for patient care.

Dr. Abston disputed the assertion that managed care would lead to better medical outcomes. “We already have managed care.”  She said that the Medicaid patients already received diet and wellness advice from their doctors and doubted that a nurse on the telephone would lead to any better outcomes.  Dr. Abston said that she had talked with doctors in other states where these companies have been and they were not at all satisfied with the changes to their states’ Medicaid programs.  Dr. Abston said that the Affordable Care Act (commonly referred to as Obamacare) is setting the payments that doctors receive from Medicaid at the Medicare code rates set by the federal government (DRGs) and that in Alabama that would be an increase for many doctors.  The managed care companies are prevented by law from paying less than those rates.

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“The children are my concern,” the Huntsville pediatrician said.  Dr. Abston warned that the managed care companies would cap access to certain services like mental health.  Currently only about half of the doctors in Alabama will take Medicaid patients and Dr. Abston said she believes more doctors will drop Medicaid if the program is serviced by the private managed care companies and that that would prevent even more patients from getting access to their care.  “We can’t stay here to 10 o’clock.”  “When the clinic is full we stop seeing patients.” Dr. Abston said that the managed care companies would put hurdles between patients and their doctors that would prevent the patients from getting the care that they need.

Rep. McClendon (himself a retired optometrist) said that he did not believe that legislation was needed for the state to implement managed care for Alabama Medicaid.  He doubted that the issue would ever appear before his House Healthcare Committee.  Rep. McClendon said that he thinks it could be done with a simple line item in the General Fund Budget.

Rep. Jim McClendon represents House District 50 which includes portions of St. Clair and Shelby Counties.  Representative McClendon is in his 3rd term in the Alabama state house.  He was unopposed in 2010.

Dr. Pippa Abston is a Huntsville pediatrician who teaches medical students and sees patients.  Her practice is an Alabama Medicaid provider.  Dr. Abston also blogs on health care issues.

Almost 21% of Alabama residents are Medicaid eligible.  Medicaid pays for almost half of the births in Alabama.  63% of all nursing home care in Alabama is paid for by Alabama Medicaid. An estimated 40% of Alabama Children are covered by Alabama Medicaid.  Alabama Medicaid pays for almost 8 million prescriptions a year. Almost one third of Alabama Medicaid’s payments go to hospital care.  Alabama state government pays an estimated 32% of the total cost of Alabama Medicaid.  The other ~68% is paid by the federal government.  During the stimulus the federal match reached 77.2%.

To learn more about Alabama Medicaid:

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To read Dr. Abston’s blog:

Brandon Moseley is a former reporter at the Alabama Political Reporter.



Expanding Medicaid is more than just adding job opportunities. This will literally save lives.


We just need more people to tout the good things Alabama has to offer.


VA officials said they felt compelled to offer the services for the first time to protect their beneficiaries and employees.


The grant will be used for Enroll Alabama, AIDS Alabama’s health care navigator program.