Governor Bentley Signs Medicaid Reform Bill & New Executive Order Aimed at Further Increasing Savings

Press Release

By:  Jim McClendon Greg Reed Robert Bentley
Date: June 6, 2013
Location: Montgomery, AL

Governor Robert Bentley on Thursday held a ceremonial bill signing for Senate Bill 340, a measure that will help increase efficiency in Alabama Medicaid while also helping improve patient care.

"We're providing a way to improve care for people on Medicaid and make smarter use of the tax dollars that support the program," Governor Bentley said. "This bill will benefit people enrolled in Medicaid by helping them have access to well-managed care. This bill will benefit taxpayers by controlling costs to the state. This represents an important milestone in our efforts to make Alabama Medicaid a more efficient and more affordable program."

Also Thursday, Governor Bentley signed Executive Order 40 establishing the Alabama Medicaid Pharmacy Study Commission. Commission members will review the Alabama Medicaid pharmacy delivery and reimbursement system. The commission will compare Alabama's program to programs in other states. The commission also will study options to reduce pharmacy costs while maintaining a quality program. Commission members will present their findings to Governor Bentley by December 1, 2013.

Reforming Medicaid by increasing efficiency and improving care has been a long-term goal for Governor Bentley. The Governor established the Alabama Medicaid Advisory Commission in October of 2012 to evaluate the financial stability of Alabama Medicaid and the care that is provided to patients.

Senate Bill 340 is built on the commission's work. Currently, Alabama Medicaid operates under a "fee-for-service" model. However, with Senate Bill 340, the state will adopt a managed care structure. Under this structure, Alabama Medicaid will be able to control costs more efficiently. Medicaid will enter into contracts with regional care organizations that will provide services for patients at an established cost. Quality assurances will ensure high standards of care. The result will be quality care at an established, controlled cost.

Senate Bill 340 was sponsored by Senate Health Committee Chair Greg Reed (R-Jasper) and House Health Committee Chair Jim McClendon (R-Springville). Senator Reed said lawmakers worked closely with healthcare stakeholders to develop the best solutions for reform.

"From the beginning of the development of SB 340, I was focused on three groups: patients who are receiving care, providers who are working to manage patient care, and the taxpayers of the State of Alabama who are paying the bill," Senator Reed said. "I am confident that SB 340 addresses the needs of those three groups in that patients will receive higher-quality care, providers will offer the best management of that care, and the taxpayers will have a better product at a lower cost. It was my privilege to work alongside all those engaged in developing and passing SB 340."

House Health Committee Chair Jim McClendon (R-Springville) sponsored the legislation in the House. Representative McClendon said reforming Alabama Medicaid will benefit the state in several critical ways.

"In addition to promoting quality of care for the beneficiaries, this will help ensure more convenient access to care," Representative McClendon said. "By controlling the escalating cost of healthcare, this will help reduce the burden on the state's General Fund, which in turn will help support funding of the many state agencies that depend on the General Fund for survival. It was my pleasure to work hand-in-hand with Governor Bentley, Senator Reed and Dr. Williamson in crafting this unique approach of providing essential services to those who are most in need."

State Health Officer Dr. Donald Williamson served as chair of the Alabama Medicaid Advisory Commission.

"I want to thank Governor Bentley, Senator Reed and Representative McClendon for their support of Alabama Medicaid," Dr. Williamson said. "This new law represents an opportunity for better care for hundreds of thousands of Alabamians who depend on Medicaid. While having the bill signed is an exciting culmination of the legislative process, the heavy lifting of implementation must now begin in earnest."

Dr. Williamson will also chair the new Alabama Medicaid Pharmacy Study Commission. Acting Alabama Medicaid Commissioner Stephanie Azar will serve on the new commission as well. Azar said the Alabama Medicaid Agency is committed to long-term improvements and reform.

"The transformation that will take place over the next few years will be significant. Medicaid is ready to take on this challenge and help the state move forward to create a program that will help support the long-term sustainability of Alabama Medicaid," Azar said. "I want to thank Governor Bentley, Senator Reed, Representative McClendon and Dr. Williamson for their leadership on this important issue and for their commitment to the health and well-being of Medicaid recipients in this state."

The Alabama Medicaid Agency is currently working with healthcare providers on establishing the geographic regions in which regional care organizations will operate. By law, the regions must be set by October 1.

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