August 7, 2013

State of Alabama
Press Release: Medicaid

Alabama Medicaid Agency moving quickly to comply with new RCO law

Only weeks after Governor Robert Bentley signed a Medicaid reform bill into law, Medicaid staff, stakeholders and others are moving quickly to comply with the law by creating the legal and operational foundation upon which to build the new healthcare delivery system.

The first two challenges under the new law center around determination of actuarially-sound districts and how to facilitate collaboration outlined in the law while remaining within state and federal law, according to State Health Officer Dr. Don Williamson, who is also leading the Medicaid transformation effort.

The proposed districts are based on several factors, according to Dr. Williamson. He explained that in addition to being actuarially sound, the districts were drawn in an effort to honor existing referral patterns and when possible to keep various health systems together.

During the month of June, the Agency met with hospitals, physicians and other provider groups and worked with an actuarial consultant to propose districts for the planned Regional Care Organizations. The map and the required state Administrative Code changes were submitted on June 28. Public input on the new map was received at a public hearing held on July 15 and additional comments were received by the Agency through August 2.

Acting Medicaid Commissioner Stephanie Azar noted that the Agency is on track to meet the law’s October 1, 2013, deadline to have the regional map finalized. Once the final rule is filed, it takes 35 days before the map is legally effective, she said.

At the same time, the Agency must develop the rules for collaboration, for governance and for what probationary or provisional certification of an RCO should entail, Dr. Williamson said

“There is extensive language in the law about anti-trust and the intent of the legislature is to allow the creation of markets. Medicaid staff is working very, very hard now on anti-trust issues. They are looking at how other states have dealt with it because it is a critical issue to get those rules out because that is the next thing that has to happen,” he explained.

After that, the state will need to write rules around what constitutes a sufficient provider network, Dr. Williamson said. "We haven't identified all the components we are looking for. Governance is one, but beyond governance, I think it is incumbent that there is some evidence that an entity granted provisional certification is capabale of putting together an adequate provider network, of being solvent, and have necessary business back office to manage capitation."

  • For more information, visit
  • For more state-wide press releases, click here