Alabama ends plan to shift Medicaid to managed care
By KIM CHANDLER
Jul. 27, 2017
MONTGOMERY, Ala. (AP) — Alabama officials on Thursday ditched a long-running plan to shift the state's Medicaid program to managed care after multiple implementation snags and expectations that the Trump administration and Congress could bring sweeping changes to the health care program for the poor and disabled.
The announcement ended a proposed overhaul that had been in the works for five years and had been heralded as the "transformation" of Alabama's Medicaid program. It would have switched some of the state's 1 million Medicaid patients to managed care, provided by regional care organizations, or RCOS, in the hopes of controlling costs and improving patient outcomes.
Alabama Gov. Kay Ivey said President Donald Trump's administration has assured her it wants to allow states more flexibility over their Medicaid programs so the state will "pursue new reform options which bring less risks and similar outcomes." Ivey said because "circumstances surrounding Medicaid have changed, thus our approach must change."
"It's a good sound business decision when you are a crossroads to stop and take a breath and look at what is best," Medicaid Commissioner Stephanie Azar said.
Azar said the state could have continued the managed care approach but had a "rocky, cliffy path" ahead. Azar said she wanted to take the work that was done to build the case management approach and apply it to particular Medicaid populations, such as women in maternity care, in the hopes of improving outcomes for babies.
Alabama lawmakers had approved the overhaul in 2013. The idea was that managed care would make sure patients got check-ups and preventative care, and limit expensive medical emergencies and emergency room visits down the line. Legislators looked to the program with hopes of saving money since Medicaid consumes nearly 38 percent of the state's general fund budget. Unlike commercial managed care which relies on private companies, the Alabama plan would have used local consortiums to fill that role.
However, the plan hit difficulties, largely involving whether lawmakers could fulfill a promise to federal health care officials to maintain Medicaid funding during the switch to avoid shortchanging patients.
"It started unraveling almost as soon as it happened," said Jim Carnes, policy director at Arise Citizens' Policy Project, an advocacy group for the state's poor.
The regional care organizations would manage patients' care, were originally supposed to begin work on Oct. 1, 2016, but were delayed amid state budget concerns. Several of 11 organizations withdrew because of investor nervousness, Carnes said. The state was moving ahead with partial implementation, with managed care set to begin Oct. 1 in two of five state regions.
Carnes said the plan was designed to protect patient care. He said he is concerned that proposals such as block grants, or state flexibility to cut services, would further slash health care for the poor and disabled in a state that has already "cut our Medicaid program to the bone."