Chamber Committee gets Medicaid update

Published 11:18 pm Thursday, May 1, 2014

Mary Hayes Finch, CEO of Alabama Primary Health Care Association, spoke at the Chamber of Commerce’s Health and Human Services Committee luncheon Thursday afternoon at the Troy Regional Medical Center.
She focused on the latest changes in Alabama’s proposed Medicaid program. Alabama is proposing a system that would be managed by regional care organizations. An RCO is a healthcare provider that would contract with Medicaid to provide services.
Finch said the goal of the Medicaid transition would be to improve care and slow down the rate of cost increases.
Teresa Grimes, CEO of TRMC, said she was in support of the proposed changes.
“There are a lot of unknowns,” she said. “But we’re all in agreement there have to be changes.”
Janet Smith, TRMC’s chief financial officer, agreed. “We’d rather have our providers running the programs than outside providers. That way, all of the money stays here,” she said.
In the past, the risks involved with underestimating the costs of care fell on the patient. The proposed system would shift that risk to the regional care organizations.
“If it takes less money to provide care with that RCO, the RCO has done well. If it takes more, the RCO absorbs the loss,” Finch explained.
The latest changes to the system took into account that most of the new RCO’s forming would be nonprofits. Finch said health care providers quickly shifted to nonprofit models in order to avoid tax liability.
“We’re talking about building a new industry of managed care companies,” Finch said.
Dr. Ben Busbee, executive director of the Charles Henderson Children’s Center, said the latest changes were fueled by the shift to nonprofits.
“Something had to happen,” he said after the luncheon. “It’s a work in progress. But, there’s a lot of unanswered questions of how it will all unfold in the end.”
The first step in becoming an RCO is to apply by August. Contracts will not start until October 2016, but the newly formed RCO’s can hire case managers and work under probationary status.
The RCO’s have to prove that they have formed an adequate network in scope and in specialty to provide the services needed.
Every RCO will work under a board of 20 members. Legislative rules have defined the make up of these boards. There will be 12 positions for those who are risk bearers (in other words, they have donated funds or accepted responsibility for profit losses), eight positions will be non-risk-bearing members. Of that eight, three will be community representatives who form a citizens advisory committee and five will be medical professionals.
Finch recommended chamber members apply as RCO collaborators so that they would be eligible for one of the community representative positions on a local RCO.
Kathleen Sauer, president of the Pike County Chamber of Commerce, was thankful for Finch’s update.
“It’s very important for us to prepare for the changes that are coming in the next two years in order to provide benefits and care for the area,” she said.
The state is asking businesses to apply as RCO collaborators, but before the system can take effect, the federal government would have to waive provisions like freedom of choice, comparability and statewide availability. The system would limit the RCO’s Medicaid patients could use to those available in the region in which they reside. The state is divided into five regions.
The application process will open May 21 and will be accepted through August for a start date of Oct. 1. By October 2016, RCOs will have to prove themselves or the state will open the region to RCOs in other regions. If no RCO wants to cover the area, national providers will then be introduced.
On May 19, Pike County’s region will hold a meeting for stakeholders, anyone who has signed up or plans to sign up as a collaborator.
To learn more about the new system, go to

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