- Alabama received federal approval last week for its Section 1115 Demonstration Waiver
to move the majority of its Medicaid beneficiaries into regional care organizations (RCOs), akin to accountable care organizations.
Although there are about three dozen states that use a similar strategy, Alabama’s format for moving to Medicaid managed care has some aspects that make it unique, reports Kaiser Health News.
- What stands out the most is Alabama isn't using a major insurance company to administer its program, opting instead to rely on new nonprofit organizations operated by hospitals and providers.
The move in some sense provides relief to the state for having not expanded Medicaid, some say, while others hope it will be a step toward expansion -- which Gov. Robert Bentley (R) has said he won't consider until the program undergoes his proposed reforms.
As part of the deal, CMS says it will provide Alabama up to $328 million over three years to help create the RCOs and fund projects that improve access to care, quality of care and contain costs. Furthermore, the state could qualify for as much as another $420 million in federal funding over five years to provide more support for the Medicaid transformation process. That brings the state's total possible funding for the effort to $748 million.
The state will still utilize health insurers for some program support, KHN adds.