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Bentley, Lawmakers to Hash Out Troubled RCOs

By Josh Moon
Alabama Political Reporter

Alabama Gov. Robert Bentley has called several lawmakers and other state officials to Montgomery for a Monday meeting on the status of the State’s troubled Regional Care Organizations.

“I assume he wants to discuss how this thing (RCOs) might be held together, if it can be,” said Sen. Jim McClendon, the chairman of the Senate Health committee.

McClendon will not attend Monday’s meeting due to a prior engagement. He said the meeting was initially set for Thursday but was rescheduled on Wednesday.

“The whole RCO thing has turned into a mess,” said McClendon, who was one of the architects of the original RCO plan. “With UAB and (South Alabama) pulling out, and with Children’s Hospital looking like they’re on the verge, I don’t know if the program can withstand that. Those are the cornerstones of this thing, and without them, we’re in a lot of trouble.”

The RCO plan would effectively transform Medicaid from a pay-for-service enterprise to a managed care system that awards service contracts to providers. Those providers would then provide care to patients for that set fee and attempt to manage patient care in a fashion that produces costs to the provider that are less than the payments received from Medicaid.

APR reported several weeks ago that UAB and USA were leaving the program over concerns about future funding and the overall stability of the RCOs. APR also has reported that numerous lawmakers are now concerned about the future of the program and have raised additional questions about the costs and contracts associated with the plan.

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According to a source familiar with the situation, a group of lawmakers plan to send Bentley a letter asking that he delay some contracts until they have a chance to examine the project and determine its longterm outlook.

One of the contracts that will be a focus of the group is a consulting arrangement with Navigant Consulting. That firm is tasked with implementing the entire RCO program and was awarded a two-year, $12.1 million contract in late 2013. That original contract has been extended once – a one-year, $8 million extension signed in late 2015 – and a second $8 million extension just passed through the Legislature’s Contract Review Committee.

McClendon said he was told by the head of Medicaid, Stephanie Azar, that the money for the Navigant contract and extensions was already factored into the organization’s budget.

Still, lawmakers want to get a firm grasp on the project, and ensure its viability, before moving forward with deals for significant money.

“The fact is a lot of folks in the legislature signed off on this and didn’t fully understand what they were signing,” said a longtime state lawmaker. “This is complicated stuff, and they didn’t take the time to sit down and go through it. Now that there are trouble, there are a lot of questions.”

McClendon said he also has questions and plans to get any of the information shared at Monday’s meeting. But he’s also cautiously optimistic.

“I think this plan can still work,” he said. “I’m not as down on it as some. But I do think we have some work to do.”

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Josh Moon is an investigative reporter and featured columnist at the Alabama Political Reporter with years of political reporting experience in Alabama. You can email him at [email protected] or follow him on Twitter.

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