By Brandon Moseley
Alabama Political Reporter
On Tuesday Governor Robert Bentley (R) announced his support for legislation that he and the sponsors hope will transform the Alabama Medicaid Agency into a more efficient and more affordable program for the taxpayers of Alabama.
Governor Bentley said, “We now have a chance to turn Alabama Medicaid into a program that provides better care while making more efficient use of taxpayer dollars,” Governor Bentley said. “The Alabama Medicaid Agency is also taking steps to prevent fraud and abuse of the system. Improving Medicaid is a long-term process, and the recommendations provided by the commission will help us put the proper reforms into place, which will benefit patients and taxpayers alike.”
Medicaid is the costliest item in the Alabama General Fund and has been growing faster than state revenues, and this does not even include the cost of the massive Medicaid expansion associated with President Obama’s costly health care reform legislation, the Patient Protection and Affordable Care Act of 2010, commonly referred to as Obamacare. Gov. Bentley has rejected the Obamacare Medicaid Expansion but the existing Medicaid program is not financially sound and is largely responsible for the need to raid the Alabama Trust Fund of $437 million to cover the general fund’s deficit. The money will run out by October 2015.
The proposed legislation will be introduced by House Health Committee Chairman Jim McClendon (R) from Springville and Senate Health Committee Chair Greg Reed (R) from Jasper and incorporates recommendations made by the Alabama Medicaid Advisory Commission.
The Alabama Medicaid Advisory Commission was established by Gov. Bentley in October. The goal of the commission is to improve Medicaid’s financial stability while still providing high-quality patient care. The 33-member commission submitted their final report to the Governor on January 30.
The Alabama Medicaid Advisory Commission was chaired by Alabama State Health Officer Dr. Donald Williamson. Dr. Williamson said, “We are providing a different Medicaid program, one that’s designed locally and implemented locally by people who best understand the local healthcare needs. The commission appreciates the opportunity to serve the Governor and to offer our perspectives on the future of Alabama Medicaid.”
Currently Alabama Medicaid uses an outdated Fee For Service model where healthcare providers bill Alabama Medicaid for services rendered and there is very little coordinated done care between Alabama Medicaid, the clients, and the various health care providers providing services to the clients.
The legislation will create regional community led managed care networks that will coordinate the health care services of the Medicaid patients in that region. The Regional care networks will become risk-bearing organizations that will likely be contracted with a commercial managed care organization to provide care, risk management, or other services in the region.
The Alabama Medicaid Advisory Commission recommends that the Legislature where appropriate shall authorize regional care networks throughout the state and establish an implementation timeline setting specific benchmarks that must be met by the networks. If a network fails to meet the benchmarks shall authorize state intervention. The Alabama Medicaid Agency will seek an 1115 waiver from CMS to implement the transformation to managed care. The plan calls for legislation to create a Medicaid cap and provide adequate flexibility for Alabama Medicaid to deal with federal mandates, rules, and regulations as well as economic uncertainty, catastrophic health events, and changing medical provider rates. The Commission encourages the renewal of the hospital and nursing home provider assessments.
The Commission recommends that Alabama Medicaid work with CMS to convert some or all CPEs to intergovernmental transfers (IGTs) to provide funding for the hospital program. The Commission also recommends changing the current hospital payment system from a per diem and per encounter system to explore changing the current hospital payment system that pays for good outcomes.
Dr. Williamson reiterated that Medicaid is taking steps to improve fraud and abuse prevention and to shift to a payment system that rewards good outcomes and quality.
The regional managed care networks would work to provide better, more efficient care for patients while also working to control costs for the state. State Health Officer Dr. Donald Williamson said that the legislation will need to be paired with private-sector efforts to create managed care networks that could contract with Medicaid to provide services to Medicaid beneficiaries.
Alabama has among the most restrictive Medicaid income limits of any state in the nation. Childless adults are not eligible for Medicaid in Alabama no matter how low their income. Parents of children on Medicaid are eligible only if their income is 11% of the federal poverty level or less ($194 per month for a family of four). All other groups with the exception of nursing home and home and community-based waiver clients are eligible only at the federally-mandated minimum level. Children from the ages of 6 to 19 are covered if their family’s household income is equal to the federal poverty line or less. Pregnant women and children ages 0-5 are covered only if they make 133% of the federal poverty line or less. Medicaid covers the aged, blind and disabled if the make $730 a month or less (for an individual). To qualify for nursing home assistance through Alabama Medicaid a senior must make $2130 a month or less (for individuals).