Federal officials OK multimillion-dollar waiver to state’s Medicaid program

Medicaid health care

The Alabama Medicaid Agency’s regional care organization plan was approved for a federal waiver by the federal Centers for Medicare and Medicaid Services (CMS), Gov. Robert Bentley confirmed Tuesday.

The waiver will give Regional Care Organizations (RCOs) up to $328 million in federal money over a three-year period to help the state’s RCOs start and pay for projects that could boost access to medical care, improve quality and reduce costs. 

“Together with the Alabama Legislature, we have made significant progress in the way the Alabama Medicaid Agency operates, making it more effective and efficient,” said Bentley. “I appreciate the Centers for Medicare and Medicaid Services for approving Alabama’s plan to use regional care organizations and the National Governors Association for its help during the process.”

Bentley said the state could qualify for up to an additional $420 million in federal money over a five-year period, bringing the total to more than $748 million to help start and improve its RCO program.

“Alabama took bold steps towards improving healthcare in our state with our plan for regional care organizations and today’s announcement proves our efforts are paying off,” Alabama House Speaker Mike Hubbard (R-Auburn) said. “This investment could lead to a more streamlined and localized system, produce better outcomes, and save millions of taxpayer dollars in the long-term.”

Senate President Pro Tempore Del Marsh (R-Anniston) agrees.

“The Federal government has determined that Alabama has been innovative with our plan to transition to regional care organizations,” Marsh said. “Over time it will save the taxpayers millions of dollars and will serve as a potential modal for states as an alternative to expanding Medicaid.”

Governor Bentley established the Alabama Medicaid Advisory Commission in October of 2012 to evaluate the financial stability of the Alabama Medicaid Agency. In 2013 the Alabama Legislature passed legislation based on the Commission’s work and implemented a managed care structure. In total, RCOs have been put in place in five state regions and are designed to provide care to around 650,000 Alabamians on full Medicaid.

“This is a significant step in our efforts to transform the delivery of services to Medicaid patients,” Bentley continued. “I will work closely with members of the Alabama Legislature in the 2016 Regular Session to ensure the Medicaid RCO model is adequately funded so we can continue our efforts in Medicaid transformation.”

The five-year agreement with CMS begins April 1.