Alabama's Governor Pitches Lottery to Salvage Medicaid Managed Care Plan

A novel, hospital-centered program to bring managed care to Alabama Medicaid is in jeopardy today after 3 years of work, only weeks after CMS signed off on the details.

Governor Robert Bentley, a retired Air Force officer and dermatologist, has told his fellow Republicans in the legislator he will veto the budget they send him if it falls short of the $785 million he says is needed to fully fund Medicaid.

That would represent an increase of $100 million and allow a transition to a system of 11 Regional Care Organizations (RCOs), provider-run entities that would deliver care to populations in their surrounding geographic areas.

Today, the Alabama Senate seemed poised to pass a budget $85 million short of Bentley’s Medicaid request, as it was unwilling to move funds from other accounts. The governor has promised to veto a spending plan that does not fully fund Medicaid.

“Legislators just don’t understand it, and I don’t think they want to,” Bentley told reporters at a press conference in Monroeville, Alabama, yesterday.

Bentley told a group of hospital employees that he believes a state lottery may offer the only way out to fund Medicaid. A lottery would require a three-fifths vote in both houses of the legislature and voter approval to amend the state constitution.

Three years ago, the governor convinced the legislature to start a transition to managed care. He seeks the change to address several problems with Alabama health care delivery: even though only poor children, pregnant women, the disabled and the elderly are eligible, costs are rising because the state has not dealt effectively with problems like obesity and chronic conditions.

Managed care would improve health care delivery in these areas and move treatment out of the emergency rooms.

Bentley’s approach would move the state away from fee-for-service but avoid some of the problems that other states have had with privatization. Hospitals and doctors would lead the groups alongside the “risk-bearing” members to deliver care. Each RCO would have a board that would require representation from specific providers and groups representing those with disabilities, along with representation from the business community.

A scathing editorial in the Montgomery Advertiser, by writer Josh Moon, was headlined: “The Alabama Stupid Test: Would You Cut Medicaid?”

Moon argues that failing to fund Medicaid and move toward managed care will continue the tide of patients toward the emergency room, where care costs more. He further notes that the legislature is putting the CMS agreement at risk, even though the federal government is ready to pay half the cost.

“Let’s be clear,” Moon writes. “Not having Medicaid isn’t an option. It serves a million people in this state, almost all of them poor children, the disabled and the elderly. So, slowing its growth is important.”