MONTGOMERY — The Alabama Medicaid Agency is charting a new course for its managed care programs, Commissioner Stephanie Azar announced this Thursday. Citing evolving federal healthcare policies and potential funding adjustments, the Agency will move away from the previously planned Regional Care Organization (RCO) initiative. Instead, Alabama Medicaid will collaborate with the Centers for Medicare and Medicaid Services (CMS) to develop a more adaptable program. This new direction aims to enhance healthcare outcomes for recipients while leveraging the state’s existing case management framework for greater cost-efficiency.
Commissioner Azar highlighted significant shifts in federal regulations, financial considerations, and emerging opportunities for state-level flexibility under the current federal administration as pivotal factors in this strategic pivot. The original RCO program, once deemed a viable path forward, has become less feasible due to updated managed care regulations. Furthermore, uncertainties surrounding funding at both the state and federal levels contributed to the withdrawal of several organizations initially poised to become RCOs.
“Federal healthcare changes are very likely on the horizon,” Commissioner Azar stated. “While the financial impacts could pose challenges for our state, the potential for new flexibilities and waiver options being considered by the federal administration offers Alabama Medicaid new avenues to achieve similar goals without the substantial upfront costs associated with the RCO model.” Commissioner Azar added, “In the days ahead, I will be engaging with Governor Ivey, our stakeholders, and CMS to formulate an innovative model that effectively reshapes Medicaid to better address the healthcare needs of Alabamians.”
The RCO model was initially mandated by state law in 2013 with the intention of transitioning the Medicaid agency away from its traditional payment structure. The goal was to incentivize the efficient delivery of high-quality healthcare services and ultimately improve patient health outcomes. While the RCO concept was initially proposed and considered appropriate in the context of the Affordable Care Act under the previous administration, Commissioner Azar explained that current circumstances indicate it is no longer the most prudent allocation of taxpayer resources.
The RCO program was initially scheduled to launch in 23 counties across north and west Alabama starting October 1, 2017.
