The chairman of the House Health Committee told the Business Council of Alabama’s Governmental Affairs Committee today that parties affected by a new Medicaid bill will have input before the legislation gets a full House vote.
Rep. Jim McClendon, R-Springville, chairman of the House Health Committee, and Sen. Greg Reed, R-Jasper, chairman of the Senate Health Committee, updated BCA members on Medicaid revision bills that will be heard in separate committees on Wednesday.
McClendon promised an open process for the legislation designed to transform Medicaid from a fee-for-service plan into a model that will allow groups operating as non-profits to provide Medicaid service in as many as eight Alabama regions.
“The bill is still alive, it’s not done yet,” McClendon said. “I don’t plan on having a vote in the House until all the parties affected by it have a grip on how it’s done and affects their profession and have opportunity for input.”
McClendon sponsored HB 454 and Reed sponsored the Senate version, SB 340.
Reed’s bill is subject to a public hearing at noon Wednesday in the Senate Health Committee. McClendon’s bill is on the agenda of the House Ways and Means General Fund Committee at 1:15 p.m. Wednesday. Both meetings are in the State House.
The BCA supports efforts to produce better health and financial outcomes for Medicaid recipients and taxpayers.
Reed said about 940,000 Alabamians depend on Medicaid, up from about 750,000 since 2008 when the economy started shedding jobs. It has a major financial and social impact on nursing homes, hospitals, physicians, medical providers, and patients.
“Medicaid is very important not only to beneficiaries, but it’s very important to the health care infrastructure of Alabama,” Reed said of the $5.7-billion combined federal-state program. “Especially in rural Alabama, it’s the underpinning of our health care system.”
Medicaid got a $615-million General Fund appropriation, but the entire state cost is about $1.8 billion including provider taxes. The remainder is federal funds. McClendon said the Medicaid budget will be “short” $100 million in 2015.
“Something’s got to be done about that not only to take pressure off the legislature to come up with the money but (also) take the pressure off the taxpayers,” McClendon said.
Reed said the goal is to replace the current fee-for-service system that requires more state tax money as Medicaid rolls grow into a system that rewards providers who produce positive health outcomes. “The best way to minimize cost is for folks to be healthier,” he said.
The legislation would authorize up to eight regions of roughly equal urban and rural patients and shift the cost-burden away from the state to those regional providers whose business acumen will, hopefully, produce better health while allowing for profits, Reed said.
“We’re moving along,” Reed said. “The BCA and (legislative) leadership and health providers and advocacy groups have been supportive as well as the governor of Alabama.”
Gov. Robert Bentley is being asked to expand Medicaid requiring more federal and state funding. He has said he will not expand Medicaid in its current form. “We’ve got big problems covering what we cover now,” McClendon said.
The legislation would require providers to show financial responsibility with a minimum capitalization of $2.5 million. “Once we can move the risk away from the state, the taxpayers and legislature we can begin to budget for Medicaid,” McClendon said.
Reed said if a regional care organization fails, Alabama could allow commercial managed care, a state takeover, or shifting patients to neighboring regions. Reed said a revised Medicaid could save taxpayers between $60 million and $75 million a year. Better yet, Reed said, more jobs will shrink the number of Alabamians dependent on Medicaid.