BCBS 'disappointed' AL Medicaid to pursue alternative to RCOs - WSFA.com Montgomery Alabama news.

BCBS 'disappointed' AL Medicaid to pursue alternative to RCOs

(Source: WSFA 12 News File Video) (Source: WSFA 12 News File Video)
MONTGOMERY, AL (WSFA) -

Blue Cross and Blue Shield of Alabama reacted Thursday morning to news that the Alabama Medicaid Agency will begin pursuing an alternative to the Regional Care Organization (RCO) initiative, a move that Medicaid Commissioner Stephanie Azar said would transform how Medicaid cares for its patients.

BCBS representatives said they were 'disappointed' that the RCO's would not continue, stating it and it's affiliated non-profit, My Care Alabama, "made a total commitment to the RCO initiative and partnership with the Medicaid Agency to achieve the goals and objectives of the project...We regret that there will not be an opportunity to move the state toward these goals." 

In a release, Azar said despite the federal administration changes and potential congressional adjustments, the agency has decided to pursue another alternative. The state will work with the Centers for Medicare and Medicaid Services (CMS) to create a flexible program to build off the current case management structure, she explained, adding the structure will be a more cost-efficient mechanism to improve recipients’ health care outcomes.

The decision was made, Azar said, after major changes in federal regulations, funding considerations and the potential for new opportunities for state flexibility of Medicaid spending and services under the Trump administration.

These key factors led to the decision to employ a new strategy for the state Medicaid program, according to Azar.  

“It is highly likely that federal health care changes are on the horizon,” Azar said. “While the financial implications could be challenging for our state, the new flexibilities and waiver options that the Trump Administration is willing to consider gives our state Medicaid program new options to accomplish similar goals without incurring the same level of increased upfront costs associated with the RCO program.  In the coming days, I will work with Governor Ivey, our stakeholders and CMS to develop an innovative model to accomplish our goal of retooling Medicaid to better serve the needs of Alabamians.”

RCO’s were mandated by state law in 2013 to move the Medicaid agency away from its current payment system to a system that would incentivize efficient delivery of high-quality healthcare services.

"When RCO’s were first proposed after the Affordable Care Act under the Obama Administration, the plan was appropriate; However, in today’s climate it is no longer the best use of taxpayer resources," Azar said.

WSFA 12 News reporter Jennifer Horton sat down with Azar about the change. 

"We've worked very hard to carry out the mandate to move forward to RCOs," said Azar. "Looking through and looking back over the months we have had hurdle after hurdle and challenge after challenge that we've been working diligently to get through to be able to pull forth the mandate. It was kind of sudden, as far as the compilation of everything coming together and finally saying 'you know let's slow down, let's take a breath, we're at a crossroads now, we've got new flexibilities that we're able to look at, is this really the best path to continue forward at this time.'"

Azar also spoke about what the people should know about future paths and what's going on in Washington regarding healthcare. 

"Change is likely coming to the Medicaid program through federal healthcare changes and we are watching very closely and monitoring that," she said. "I do feel that there's likely to be some financial constraints placed upon the states from the federal government trying to tighten up those expenditures a little bit in the future. How that's going to come, whether it be a per capita, or a block grant type of scenario we're not really sure, but we're remaining cautiously optimistic that with that we're going to be given greater flexibility to work towards, so our recipients can still be taken care of and that we can meet those challenges. We're hoping that we won't get squeezed too tightly by the feds when it comes down the pipe because we are an extremely efficient Medicaid program, we've been listed as one of the third lowest in the nation, so we want to make extra sure that Alabama gets rewarded for that efficiency and not penalized for it."

Azar said she's optimistic that they will not be penalized for not having expanded.

"The versions of the healthcare law bills that we've looked at, they've tried to put safety net provisions in both of those to try to give some money each year for, I believe, an over five year period to be able to help with that, but our position is it needs to be a little bit more to reward us for not having done that, since that's the way that the Trump administration is wanting to go. The other states that did expand are going to be getting more federal dollars, and we should not be penalized for not having expanded. Whether people are for or against expansion, we shouldn't be penalized because we didn't and others did under this administration," Azar said. 

Azar said the current recipients have not been disrupted by the change. 

"The recipients have not been changed over into any other new type of model," she said. "They've been going forward with the care we're providing now and seeing their doctors and providers as they should, so there should be minimum disruption on this decision as far as the recipient goes. We're going to be looking toward a model to provide them better quality care and help be better management of our tax payer dollars, so right now there should be minimum disruption to them."

Azar said there is no specific timeline for the change at the moment, as they are waiting for a decision from Washington D.C. on healthcare.

"We will do everything we can to speed up getting a new model and transition in place for the RCO so that we can begin providing that case management to those recipients who currently don't have it." 

Gov. Kay Ivey released the following statement on the announcement: 

"I support Medicaid’s shift in reform strategy, which has been fully shared with legislative leadership and other key stakeholders. I spoke with Health and Human Services Secretary Tom Price, and he has assured me of the Trump administration's desire to work with the states to allow more flexibility in Medicaid services moving forward. This flexibility brought us to a crossroads where we reconsidered the risks and rewards of RCOs, and decided instead to pursue new reform options which bring less risks and similar outcomes. The RCO model didn’t fail; instead the alternative is a recognition that the circumstances surrounding Medicaid have changed, thus our approach must change. Our end goal is clear - to increase the quality of services provided and protect the investment of Alabama taxpayers.”

The Arise Citizens' Policy Project policy director Jim Carnes issued this statement on the announcement:

“Alabama Medicaid’s decision to end its effort to develop homegrown managed care through regional care organizations is a disappointment but not a surprise. We’ve seen the Legislature’s support for the plan wane since it passed unanimously in 2013, as expectations for its budgetary impact shifted. Medicaid policy changes promised by Congress and the White House after the November election further clouded the prospects for RCO success.

“From the start, Arise has believed that strong consumer oversight is an essential component of Medicaid reform. That’s why we’ve worked hard with our partners at the Disabilities Leadership Coalition of Alabama to fulfill the consumer engagement role spelled out for us in the RCO law. We regret that this innovative, collaborative experiment has run aground, but we welcome the opportunity to apply those same consumer-focused principles in whatever alternative reforms Medicaid pursues.

“State ‘flexibility’ for Medicaid is a hot topic in Washington right now, and RCOs were a good example of state-based decision-making about health care delivery. But ‘flexibility’ cannot be a code word for undermining the basic promise of Medicaid by cutting essential benefits, shortchanging health care providers or taking away coverage from children, seniors, pregnant women, and people with disabilities across Alabama. Medicaid is the backbone of our state’s health care system, and we must keep it strong.”

Senate Minority Leader Quinton T. Ross Jr., D-Montgomery, also released a statement:

“Today, the state of Alabama decided to move in a new direction in the area of health reform for our state. While I support the decision to forego implementing the RCOs as our Medicaid funding model at the federal level could be in jeopardy, I will not support balancing our state budget by taking access to healthcare away from our children and our most vulnerable citizens.

“We are indeed at a crossroads, but we should use this problem to urge Republican leadership to work across the aisle to find sustainable solutions for our Medicaid program,” Ross said. “The previous administration squandered the opportunity for our state to draw down millions in federal Medicaid dollars, which has left us at this crossroads. We must respond by passing legislation requiring our corporate citizens to pay their fair share of state taxes, because denying services is not a viable option.”

The program was set to go into effect in 23 Alabama counties on October 1, according to the release.

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