Joseph Rugg's Health Law Blog

About 120,000 Medicaid patients in the Shoals and Tennessee Valley will receive most of their health care from a network of willing providers within a 10-county region beginning in late 2016

The new direction for the state agency is part of a plan legislators approved earlier this year to control Medicaid’s ballooning costs.

State leaders plan to turn Medicaid from its current fee-for-service model to a managed care approach, beginning in fiscal 2017.

To make the transition, Medicaid officials are splitting the state into five areas where Regional Care Organizations — largely run by healthcare providers — will operate.

“The (Regional Care Organizations) came about because we’ve been on a fee-for-service type system with Medicaid, which doesn’t encourage providers to maximize efficiencies,” said Rep. Ed Henry, R-Hartselle, one of several lawmakers on Gov. Robert Bentley’s Medicaid study commission.

“This reform measure is to try to put efficiencies in Medicaid,” he said. “We pay providers a set amount per patient and if they deliver that care for cheaper, they make money. If they don’t, they lose money.”

David Spillers, CEO of Huntsville Hospital, said the regional organizations, or RCOs, will be a complete change in how Medicaid providers are reimbursed. The Huntsville Hospital system includes 12 medical facilities in north Alabama, including Helen Keller Hospital in Sheffield.

See on www.timesdaily.com