Medicaid Transformation
Facilitated by
Alabama Primary Health
Care Association
Session Overview
Statutory RCO Requirements
RCO Planning Principles
Statewide RCO regions
Timeline and Anticipated Next Steps
Medicaid System Transformation
“Will not expand Medicaid under the current
system”…Governor Robert Bentley
Alabama Legislature – SB 340
Provides for the delivery of medical services to
Medicaid beneficiaries on a managed care basis
through regional care organizations or
alternate care providers
Medicaid System Transformation
• Managed Care (Risk Based)
• Medicaid will contract with qualified
organizations (RCO or ACP) where the
organization assumes risk for the cost of
services covered under the contract and
incurs loss if the cost of services exceeds
the payment under the contract
(10/1/2016)
Medicaid System Transformation
Regional Care Organizations
• An organization of health care providers that
contracts with Medicaid to provide a
comprehensive package of Medicaid benefits
to Medicaid beneficiaries in a defined region of
the state and meets requirements of enabling
statute
Medicaid System Transformation
Alternative Care Providers (ACP)
• A contractor, other than a RCO that agrees to
provide a comprehensive package of Medicaid
benefits to Medicaid beneficiaries in a defined
region of the state pursuant to a risk contract;
traditional commercial MCO
Medicaid System Transformation
• ACP Triggers
• Medicaid may contract with an alternate
care provider if:
– The RCO fails to meet contract requirements
– If no organization has been certified as an
RCO or probationary RCO by October 1,
2016
– If no RCO is willing to accept the
contract
Medicaid System Transformation
• Collaborators
• Private health carriers, third party
purchasers, provider, health care center,
health care facility, state and local gov.
entity, or other public payers, corporations,
individuals and consumers who are
expecting to collectively cooperate,
negotiation or contract with another
collaborator or RCO
Statutory RCO Requirements
Medicaid Responsibilities
1. Establish statewide managed care regions
2. Establish policy and process for application
and certification as collaborators; certify
qualified collaborators
3. Establish criteria for probationary and full
certification of RCOs; certify qualified RCOs
Statutory RCO Requirements
Medicaid Responsibilities
4. Establish quality standards and minimum
service delivery network requirements
5. Establish and support statutory quality
assurance and improvement provisions
6. Establish requirements for HIT, data analytics,
quality of care, quality improvement
measurement and standards
Statutory RCO Requirements
Medicaid Responsibilities
7. Conduct initial readiness audits and ongoing
financial audits
8. Monitor federal Medicaid regulatory
compliance throughout implementation and
management to assure FFP is maintained
Statutory RCO Requirements
Medicaid Responsibilities
9. Establish procedures to safeguard
integrity of claims payment and protect
against wrongful denial of claims
10.Establish policy and process to address
grievances of enrollees and RCO or ACP
Statutory RCO Requirements
Governance Structure
12 members risk-bearing members
8 non-risk bearing (statutory) members
3 community representatives
Statutory RCO Requirements
Governance
• Risk-bearing Members (12)
• Participants bear risk by contributing cash,
capital, or other assets to the RCO or contract
to treat Medicaid beneficiaries at a capitated
rate per beneficiary even if the RCO does not
reimburse the participant
Statutory RCO Requirements
Governance
• Non-Risk-bearing Members (8)
• Participants that do not represent risk bearing
members include 5 medical professionals
providing care to Medicaid patients in that
region
 3 of these will be primary care
physicians; 1 from APHCA/ALNMA, 2
from regional board of health
Statutory RCO Requirements
 Remaining 2 medical professionals
include an optometrist and pharmacist
• None of the non-risk bearing professionals
can be risk bearing or be employed by a risk
bearing organization
Statutory RCO Requirements
Governance
Community Representatives (3)
Participants shall include:
 Chair of the citizens’ advisory committee
 Another citizens’ advisory committee member
elected by the committee (must be member of AL
Arise or AL Disabilities Leadership Coalition
 Business executive nominated by Chamber of
Commerce in the region
Statutory RCO Requirements
• Citizens’ Advisory Committee
• Committee will advise the Board on ways
the organization may be more efficient in
providing quality care and carry out other
functions and duties assigned to it by the
RCO and approved by Medicaid
 At least 20% shall be Medicaid patients
enrolled in the RCO
Planning Principles
1. Any Willing Provider - A provider may
contract with any RCO to provide
services in a Medicaid region if the
provider is willing to accept the
payments and terms offered comparable
providers
Medicaid Redesign Principles
2. Provider Reimbursement Floor –
established by AMA for providers inside
and outside of the region; may be higher
for in region providers, but must be at
least the Medicaid floor (current rate?)
to prevent RCOs from unfairly excluding
providers outside of the region
Medicaid Redesign Principles
3. Every RCO will contract with Children’s
Hospital of Birmingham, UAB Hospital, &
other hospitals as necessary to ensure
specialty services remain available
4. Maternity Care Program will be included in
RCO services and capitation
5. PCN scope of case management will be
included in RCO services and capitation
Medicaid Redesign Principles
6. Capitation amount for each region will be
region specific.
7. 700,000 out of 900,000 Medicaid patients will
be covered by RCOs
8. Family planning and dentistry will not
participate in RCOs during phase 1
9. LTC will not be included in RCOs
Statewide Medicaid Regions
1. Market demand will determine the number of
RCOs per region; each will have a minimum of
60,000 eligibles; larger regions help to
minimize risk
2. Regions not modeled after any existing
government regions or districts; other
Medicaid regions will transition into RCO
regions (i.e., maternity care)
Statewide Medicaid Regions
3. Regional organization intended to maintain
hospital and physician referral patterns/patient
relationships; minimize border crossover issues
(also, see any willing provider)
4. Patient residence establishes basis for RCO
assignment and capitation
• Draft Map; final
adoption to
occur by
October 1, 2013
• Public Hearing
Timeline and Next Steps
• Public comments for policies through
Administrative Procedures Act (35
days for public comment)
• Opportunity for Public Hearing
Timeline and Next Steps
October 1, 2013- Establish/Adopt Medicaid
Managed Care Regions
October 1, 2014- Organizations seeking to become
a RCO must have governing board and structure
approved by Medicaid
April 1, 2015- Probationary RCOs must
demonstrate ability to establish adequate medical
service delivery network
Timeline and Next Steps
October 1, 2015- Probationary RCOs must meet
financial requirements
October 1, 2016- Probationary certification expires;
must demonstrate capability of providing services
pursuant to a risk contract
Timeline and Next Steps
Next Steps
Rules around Collaboration – possible
emergency rule submitted in September
Provisional Certification – possible rules
submitted by January 2014 (requirements,
application content, risk bearing tests)
Timeline and Next Steps
Next Steps
RCO Certification – final rules possible by
April 2014
AMA open to RCO applications for provisional
status possibly from April – August 2014
Provider Activities
1. Understand RCO system design, requirements,
timeline
2. Internally assess your role within the planning,
development, implementation of RCO and ongoing
program
3. Collaborate as allowed under statute with others at
appropriate time
4. Educate patients at appropriate time
Questions
Alabama Primary Health Care Association
Sharon Parker, RN CVRN, CHTS-CP
Chief Quality Officer
sparker@alphca.com
334-386-3985