Alabama moving to managed-care model for Medicaid

Alabama is moving from the traditional fee-for-service delivery model to a managed-care model under a new regional care organization waiver.

The CMS approved the 1115 waiver last week (PDF) and will provide up to $748 million in the next five years to implement Alabama's regional care organizations. 

In May 2013, Alabama passed legislation to implement regional care organizations, its version of accountable care organizations. The RCOs will be managed by local providers, and upon approval by the state will deliver healthcare services to Medicaid beneficiaries at a fixed cost. 

Under state law, the RCOs are divided into five regions of Alabama. Eleven local providers have been approved by the state so far to participate, with at least two providers per region. The participants include community hospitals and clinics that will provide primary and specialty care, as well as behavioral health services. They include Centene, Triton, St. Vincent's Health System, and Jackson Hospital.

Danne Howard, Alabama Hospital Association executive vice president, applauded the CMS' approval, and added that through RCOs, “Medicaid recipients will receive better coordinated care in a more efficient way, and the state budget will benefit from ongoing efforts to bend the future cost curve.”