MONTGOMERY — The Alabama Medicaid agency now has contracts worth up to nearly $89 million with seven private entities to manage the care of most Medicaid recipients under a new system the agency says will result in better care.

The two-year contracts are for the new Alabama Coordinated Health Network, or ACHN, which begins Oct. 1.

The program creates a coordination system that links patients, providers and community resources in seven regions, according to Medicaid. Delivery of medical services is not part of the networks.

Medicaid’s stated goals for the ACHNs include making improvements to the quality of care and incentivizing the networks and providers to achieve “quality measures” in the areas of childhood obesity, infant mortality rates and substance abuse disorders.

“Those are three very serious issues and we are really excited about this program,” Medicaid Commissioner Stephanie Azar told members of the Legislative Contract Review Committee on Thursday.

Gov. Kay Ivey told Alabama Daily News her administration is constantly working to explore ways to make improvements to health care.

“Through the Alabama Medicaid Agency, we will roll out a program, the Alabama Coordinated Health Network, that offers our higher-risk Medicaid recipients an even better quality of care by taking a more comprehensive approach to their health care,” Ivey said. “I look forward to the positive impact this program will bring men, women and children in our state.”

Medicaid recipients who have full Medicaid benefits, maternity care and family planning benefits will be in the networks. That’s about 750,000 people, according to Medicaid.

It may take several years before the agency experiences cost savings, spokeswoman Melanie Cleveland said.

“The goal of the ACHN program is improved quality of care and appropriate utilization of services for Medicaid recipients in a cost-effective manner,” she said.

Medicaid is expected to receive about $7.1 billion in funds in 2019, most of those dollars are federal.

After years of work and millions of dollars spent, the state in 2017 backed away from its proposed Regional Care Organization plan, which would have taken Medicaid from its fee-for-service model to a managed care model. It was expected to save the state money, but officials cited changing federal regulations as a reason to abandon it.

Sen. Greg Reed, R-Jasper, was involved in the Regional Care Organization plan. He said Thursday he’s glad to see Medicaid expanding its managed care of recipients

“Having healthier patients is beneficial for them, obviously, but also for the state in the cost of the care,” Reed said. “It is better quality care and yields better outcomes.”

A cut for 1 agency

The Alabama Department of Public Health currently provides care coordinators for some of the Medicaid recipients who will soon be under the care of the private entities. The change will mean a $21 million revenue loss to Public Health, which is currently paid by Medicaid for the services of about 150 social workers, Public Health Officer Scott Harris said.

“I can understand Medicaid’s position, they are trying to save money by privatizing this, but it is a tremendous impact on our agency,” he said.

Harris said the department is looking for other positions for the social workers. Some of that $21 million is also used for other care and costs at Alabama Department of Public Health facilities, Harris said.

The department received about $113 million in total state funds this year and $686 million in federal and local funding.

Some of the care coordination Alabama Department of Public Health has done is with family planning patients. They will continue to get medical care from the health department.

“In some cases, we picked up on women in abusive situations or who were being trafficked,” Harris said.

Backed by Arise

Medicaid serves more than 1 million low-income Alabamians, most of them children. The new system has the support of the advocacy group Alabama Arise.

Jim Carnes, Arise’s policy director, said each ACHN has a consumer representative on its board, as well as a consumer advisory committee.

“We’re very encouraged for this opportunity for Medicaid consumers to have a voice in Medicaid policy,” he said. “It’s something new and we applaud Medicaid for it.”

Carnes said he is also hopeful the networks will be able to identify needs of recipients, like inadequate nutrition, transportation issues, or a need at their home like a lack of air-conditioning, and point them to help.

“It will not be the job of Medicaid or regional organization to provide the services to address those problems, but the new factor will be to identify needs and connect to community resources,” Carnes said.

Three of the seven regional contracts were awarded to My Care Alabama, an affiliate of Blue Cross and Blue Shield of Alabama.

“We look forward to providing them with the high quality standards of customer service, efficiency, reliability and technical innovation already available to our commercial members,” said Blue Cross and Blue Shield of Alabama President and CEO Tim Vines.

Sen. Larry Stutts, R-Tuscumbia, is aware of the pending change largely because his medical practice in Sheffield serves Medicaid recipients. He’s hopeful the managed care will help patients make better choices, take their medications, and reduce their visits to emergency rooms.

“The E.R. is the most expensive place to enter the health care system,” Stutts, an obstetrician, said. “Hopefully, with the care coordinators, we’re going to change that.”

-- Alabama Daily News reporter Caroline Beck contributed to this report.

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