The Alabama Legislature passed a sweeping revision to Medicaid that replaces the way the program delivers and pays for care with regional managed care operators.
Under the legislation passed Tuesday, the State Medicaid Agency will no longer bear financial risks but will instead assume the role of contract administrators. Savings of $50 million to $75 million over five years and future cost containment is expected.
Privately owned Regional Care Organizations won't deal directly with patients, but will contract directly with doctors to provide care.
Governor Robert Bentley has announced his support for changes to Alabama's Medicaid system that would impact one out of every five Alabamians.
The Medicaid Advisory Commission advocates changing the basic operating model from a fee-for-service system to a managed care program. Under the proposal, private-sector contractors would develop care networks in eight newly-created regions across the state.
The new framework would aim to offer better service to patients through regional operations that are responsive to local needs, according to the governor.
Alabama's top health officer says state Medicaid is facing a major funding shortfall.
The director of the Alabama Department of Public Health, Dr. Don Williamson, says federal changes will add $30 million to the state's Medicaid funding needs for 2014.
The Anniston Star (http://bit.ly/TdPa3M ) reports that state officials didn't know about the additional cost when voters approved using $437 million from a state fund to plug the Medicaid budget in September.