BCA And Hospital Association Partner to Educate Legislators on Medicaid/RCO Implementation


The Business Council of Alabama partnered with the Alabama Hospital Association on Tuesday to explain Medicaid’s important role in economic development, job creation, quality of life, and to explain a new regional delivery system.

Medicaid is a joint state-federal health insurance plan for low-income children, pregnant women, the elderly, and disabled. Medicaid underpins the state’s entire medical system. It’s a $6.4 billion program but it will need state financial help in the 2016 regular legislative session, which began Tuesday.



The BCA and the AHA met with legislators, health care executives, and providers to explain Medicaid and the new managed care Regional Care Organizations.

BCA President William J. Canary said that support for and maintenance of Medicaid is a matter of economic development, quality of life, and jobs. He said when businesses look at a state for possible locations, they check for the availability of employees, infrastructure, the education system, and health care.

“From our point of view, this is a critical issue with a capital ‘C’,” Canary said.

Danne Howard, the Alabama Hospital Association’s executive vice president/chief policy officer, said Medicaid needs $105 million more from next year’s General Fund just to maintain the current level of services. Otherwise, services could be cut, hospitals could close, employees will lose jobs, patients will have fewer health care choices, and medical professionals could leave the state.

“We want to ensure they have access to quality care,” Howard said.


RCOs, which will provide regional managed care for Medicaid recipients, are to become operational in October. But without start-up funding there will be no infrastructure to serve patients. “The ultimate goal is to save money but you have to have to invest in the front end,” Howard said.

The BCA’s position is that passage of Medicaid reform legislation in 2013 positioned the state to manage all aspects of Medicaid, including cost and care delivery and the opportunities that RCOs can contribute to the quality of health care in Alabama.

“From the BCA’s perspective, this is beyond the importance of one person,” Canary concluded. “We’re all in this together.”

Here are some Medicaid facts:

  • Medicaid is a $6.4 billion business, one of the largest in Alabama, serving about 1 million Alabamians.
  • Hospitals employ 84,000 men and women directly and rural hospitals employ 15,000 people. Of the top 50 employers in Alabama, 19 are hospitals. The entire health care sector employed 240,000 people in 2012.
  • Medicaid’s combined state, local, and federal appropriations of $6.4 billion last year included $1.9 billion of it from a state General Fund appropriation, state transfers, and hospital, nursing home, and pharmacy provider taxes.
  • Without the economic benefits of Medicaid, hospitals, nursing homes, and pharmacies will close, and doctors will leave Alabama. Eight Alabama hospitals have closed over the last five years including three in rural areas.
  • There are no childless adults on Medicaid and Alabama has among the most restrictive Medicaid eligibility in the nation.
  • Since 2010, Medicaid has grown at an annual rate of 2.1 percent.

“Medicaid is not growing out of control,” Howard said.