July 3, 2014

State of Alabama
Press Release: Medicaid

RCO progress exceeds expectations as Agency implements law

A little over a year after state lawmakers passed legislation to transform Medicaid, the Agency is making significant progress toward implementing a new health care delivery system that places greater focus on value and outcomes.


“We are a lot further along than we initially anticipated,” said State Health Officer Dr. Don Williamson, appointed two years ago to lead Medicaid’s transformation. 


It has also been surprising to see the various approaches potential RCOs have taken, he said. “I can absolutely say that the RCO concept in April 2013 is very different in June 2014. The idea that we are seeing RCOs looking at partners with capital to share risk, or where we see multiple hospitals building a new delivery system for the state, is significant.”


He noted that one of the most important milestones to date was the submission of the Section 1115 Demonstration application to the Centers for Medicare and Medicaid Services on May 30. The 1115 waiver is critical to Medicaid’s successful transformation, Dr. Williamson explained, because the state lacks the essential infrastructure to operate and oversee the new system, and also because hospitals will need help in making the transition to a new reimbursement system.


“Medicaid and the state of Alabama do not have much experience with managed care, so part of what we are requesting is financial support to build the necessary infrastructure. The other piece that we are concerned about is the potential impact on hospitals, especially those in rural areas. Our 1115 proposal asks for a transition funding pool to help smooth that process,” he said.


Dr. Williamson also characterized the past year as one in which there has been much activity, but also a growing awareness of the challenges that are ahead. To meet requirements set out in law, for example, new rules have had to be created to address a wide range of issues ranging from how RCOs will be governed, to financial and network adequacy requirements.


“I remain amazed by the complexity that goes along with breaking new ground, and that each new decision, has consequences for healthcare providers in our state, both public and private. I am excited about the opportunity to make a positive difference going forward,” he said.

  • For more information, visit http://medicaid.alabama.gov
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