— MONTGOMERY, Ala. (AP) — The Alabama State Legislature is set to begin work on an overhaul bill that will change Medicaid to a managed care plan by 2017.
The plan that will be introduced to House and Senate committees is the result of a 14-month effort by the 33-member Alabama Medicaid Advisory Commission formed by Gov. Robert Bentley in late 2012.
The effort represents a major restructuring of how Medicaid works. Presently, Medicaid is administered by the state and is a not-for-profit entity. The managed care option offered by the commission would turn over delivery of health care to for-profit companies. Those companies would operate in up to eight regions of the state. Those regions would be determined by an actuary.
The Alabama Medicaid Agency now pays a provider a set amount for each service rendered, also called "fee-for-service." The state is looking to provide a new structure that will allow for a predetermined amount of money per patient annually to be paid to a "regional care organization" that will then provide and pay for all Medicaid services.
The regional care organization or an alternative provider would be the administrator in charge of delivering health care within a region. The state agency would pay the administering agency between $300 million and $500 million per year to care for all of the Medicaid patients' needs in their region. If they can do that and have money left over, they would make a profit. The government hopes profits would provide incentive to keep the population healthier.
Alabama Medicaid's annual appropriation from the General Fund budget exceeds $600 million and needs continue to grow. It gets the bulk of its money from other sources, including the federal government, and is a $6 billion a year program.
Jim Carnes of Alabama Arise, a citizens' advocacy group for the poor, explained that "Medicaid is the backbone of the health system we depend on in Alabama. Medicaid sustains hospitals in rural areas, children's hospitals and without Medicaid payments, they would close." More than 11 percent of Alabama's workforce has a job in the health care industry. Carnes was a member of the advocacy commission.