Dive Brief:
- Alabama Gov. Robert Bentley has received a federal waiver from CMS to shift the state's Medicaid system to 11 regional care organizations (RCOs) to help control costs.
- The state could receive as much as $748 million over the next five years to implement the program, with roughly half going to set up the RCOs over the first three years.
- The RCOs will receive a share of Medicaid funds by aligning with the shift from fee-for-service to value-based care. Those that promote health and prevent expensive treatments will be able to keep any share of the funding remaining at the end of the year, according to the Montgomery Advertiser.
Dive Insight:
The new program is expected to enroll 630,000 Medicaid patients. Although many say it won't necessarily cut costs, it's a way to start controlling Medicaid costs - which equate to 38% of the state's General Fund budget. The RCOs are expected to be implemented on October 1.
Funding for the RCO's cannot be used for the state's current Medicaid services, which will need an additional $157 million this year to keep it adequately funded. Gov. Bentley said Medicaid costs to the General Fund have increased 59% since 2006 - which he referred to as likely unsustainable.
Gov. Bentley said his goal is to "not have a single person on Medicaid." More than one million residents qualified for Medicaid last June, as reported by the Montgomery Advertiser.