Posts Tagged RCO

What Have You Done for Me Lately?

What Have You Done for Me Lately?

“What have the Medical Association and ALAPAC done for me lately?”

It’s a question posed to me often, in various forms, by physicians whom I’m asking to join the Medical Association and contribute to ALAPAC. It’s a tough one to reply to – not for a shortage of answers – but for the difficulty, even for a seasoned communicator like myself, to encapsulate succinctly.

I like analogies, so here’s one to start: a legislative session is like a surgical procedure; hundreds of things can go wrong, and getting through one without incident is deemed a success. To reiterate: when nothing bad happens in a legislative session that is a victory. Preposterous? Allow me to elaborate.

It’s been attributed to everyone from Thomas Jefferson to Mark Twain, but the old adage “no one’s life, liberty or property are safe while the legislature is in session” certainly rings true. The Alabama Legislature may only be in session three days each week for three-and-a-half months (plus special sessions) a year, but just like with a surgical procedure, countless things can go wrong during that time.

Representing physicians at the legislature, the Medical Association is severely outnumbered. There are nearly 600 registered lobbyists in Alabama, many with clients – drug companies, health insurers, personal injury lawyers – interested in health care but whose corporate profits strategy or legislative goals are at odds with those of patients and physicians. I’ve heard physicians say they don’t like politics, that it’s dirty business. This is understandable but frankly, irrelevant. Feelings have no place here. Like it or not, politicians are in your business.

On average, a typical legislative session will see a combined 1,000 House and Senate bills introduced, with roughly 15 percent touching health care in some fashion. Over a four-year legislative cycle, that’s 600 “procedures” to get through with as few complications as possible. Some of these are initiatives the Medical Association supports, others will need tweaking through amendments or substitutes, still others will have no redeeming elements whatsoever and are outright opposed.

If that sounds simple in principle, it is not so in practice. To illustrate the complexity and unpredictability of an average legislative day, picture an emergency physician. At the State House, there is little warning of what daily catastrophes will present themselves or what will have to be triaged depending on severity. Committee testimony, one-on-one meetings with legislators, bill negotiations with opposing parties, these are all part of a typical legislative day. Getting through the day without any bad happenings is a success, even more so all 30 days of the session.

While it is the Medical Association’s role to lobby the legislature on issues important to physicians, it is the role of the Alabama Medical PAC (ALAPAC) to help elect candidates to office with whom physicians and the Medical Association can work on important health-related issues. Over just the past few legislative sessions alone, the Medical Association, with the help of ALAPAC-supported legislators, successfully saw passage of several important bills.

These include “virtual credit card” legislation to help medical practices from unknowingly getting hit with hidden processing fees in electronic payments from health insurers and RCOs; the chemical endangerment “fix” legislation protecting pregnant women and their doctors from prosecution for the issuance of legitimate prescriptions (after the courts issued a new interpretation of Alabama’s chemical endangerment of children law); and, direct primary care legislation, which ensures state government stays out of private contracts between physicians and their patients. The list also includes legislation related to increasing naloxone availability, establishing guidelines for interstate medical licensure, and preventing Medicaid cuts, to name but a few.

On the opposite end of the spectrum, other proposed legislation is so bad there is no “fixing” it, bills like the Patient Compensation System legislation from 2016. The PCS legislation would levy an $80 million tax increase on physicians to fund a new government-administered malpractice claims payout system that would deprive physicians and legitimately-injured patients of their legal rights, undo decades of medical liability reforms and make Alabama doctors appear – on the national claims database – to be practicing sub-standard medicine. This legislation was, with the assistance of ALAPAC-supported legislators, defeated.

In the same vein as the PCS bill, pharmaceutical legislation was introduced in 2017 that would (1) lower biologic pharmaceutical standards in Alabama law below those set by the FDA, (2) withhold critical health information from patients and their doctors and, (3) significantly increase administrative burdens on physicians. This legislation met the same fate as the PCS legislation, but both bills are expected to return in a future session. (Click here for a complete recap of the 2017 legislative session.)

Clearly, the Medical Association and ALAPAC have been hard at work for physicians and patients, from the primary care doctor to the sub-specialist. There is a natural tendency for physicians to associate and support their respective specialties, which they unequivocally should. At the same time however, the collective strength of a unified state medical society representing all physicians of all specialties and the patients they care for is much greater than any individual specialty on its own.

This article began with a question and so it is fitting to end with one: What have you done lately to help the Medical Association and ALAPAC succeed for you?

Posted in: Advocacy

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Alabama Medicaid to Pursue an Alternative to RCOs

Alabama Medicaid to Pursue an Alternative to RCOs

MONTGOMERY – Alabama Medicaid Commissioner Stephanie Azar announced Thursday that in light of known federal administration changes and potential congressional adjustments, the Alabama Medicaid Agency will pursue an alternative to the Regional Care Organization initiative to transform the Medicaid delivery system. The state will work with the Centers for Medicare and Medicaid Services to create a flexible program that builds off the Agency’s current case management structure as a more cost-efficient mechanism to improve recipients’ health care outcomes.

Commissioner Azar cited major changes in federal regulations, funding considerations, and the potential for new opportunities for state flexibility regarding Medicaid spending and services under the Trump Administration as key factors in the decision to employ a new strategy for the state Medicaid program. Since the passage of the RCO statute, new managed care regulations have made the RCO program less viable for the state. Additionally, funding uncertainties at the state and federal levels led to the withdrawal of several probationary RCOs.

“It is highly likely that federal health care changes are on the horizon,” Commissioner Azar said. “While the financial implications could be challenging for our state, the new flexibilities and waiver options that the Trump Administration is willing to consider gives our state Medicaid program new options to accomplish similar goals without incurring the same level of increased upfront costs associated with the RCO program. In the coming days, I will work with Gov. Ivey, our stakeholders and CMS to develop an innovative model to accomplish our goal of retooling Medicaid to better serve the needs of Alabamians.”

The Medical Association would like to thank Commissioner Azar for her diligence through the RCO process and willingness to work with Alabama’s physicians.

“Navigating through this process hasn’t been an easy one, and we certainly recognize the work that Commissioner Azar has done on the behalf of Alabama’s physicians to help improve the Medicaid program,” said Medical Association Executive Director Mark Jackson. “We look forward to our continued working relationship with the Commissioner and Gov. Ivey’s administration to solve the challenges on the road ahead.”

Gov. Ivey also supported the shift in strategy adding by statement: “The RCO model didn’t fail; instead the alternative is a recognition that the circumstances surrounding Medicaid have changed, thus our approach must change. Our end goal is clear – to increase the quality of services provided and protect the investment of Alabama taxpayers.”

RCOs were mandated by state law in 2013 to move the Medicaid agency away from its current payment system to one that would incentivize efficient delivery of high-quality healthcare services and improve health outcomes. When the RCOs were first proposed after the Affordable Care Act under the Obama Administration, the plan was appropriate; however, in today’s climate, it is no longer the best use of taxpayer resources, she said. The program was set to launch in 23 north and west Alabama counties on Oct. 1, 2017.

Posted in: Medicaid

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RCO Implementation On Schedule; New Regions Offered to Other Probationary RCOs

RCO Implementation On Schedule; New Regions Offered to Other Probationary RCOs

MONTGOMERY – The Alabama Medicaid Agency has been notified that Envolve, a wholly-owned subsidiary of Centene, is ending its agreement as a capital contributor with all five Alabama Healthcare Advantage (AHA) organizations that had planned to operate as Regional Care Organizations this fall.

Alabama Medicaid Commissioner Stephanie Azar said the AHA organizations have notified the Agency that they intend to end their pursuit of full certification, pending a final decision by the five regional boards in the upcoming days.

While the immediate result would be the loss of five probationary RCOs, the Agency is still in position to implement Regional Care Organizations by Oct. 1, 2017, under a 2013 state law that allows current probationary RCOs to provide services in additional regions, Commissioner Azar said.

The law requires the State to first offer existing probationary RCOs the opportunity to provide services in other regions if no RCOs are certified in a region. The withdrawal of AHA would leave Regions B, D and E without a certified RCO.  The Agency has implemented a process to offer the vacant regions to other probationary RCOS.

Two probationary RCOs have availed themselves of the process. Alabama Community Care – Region A and My Care Alabama have taken initial steps to qualify to offer services in these three regions. Both organizations are already probationary RCOs in the north Alabama region (Region A) and Alabama Community Care – Region C is also a probationary RCO in the western region of the state. Both have put in writing interest to provide services in Regions B, D, and E and are working closely with the Agency to accomplish this goal. As a result, the Agency has confidence the state can have at least one certified RCO in each of the regions by Oct. 1, 2017.

If for some reason no probationary RCO becomes fully certified and contracts to offer services in these regions, then state law allows the state to offer “alternative care providers” the opportunity to operate in those regions.

Gov. Robert Bentley emphasized that Regional Care Organizations represent the best plan to transform the Medicaid health care delivery system in Alabama.

“We will continue to move forward with our Regional Care Organizations, because we must have a delivery system for Medicaid that provides high-quality care, while working to reduce the cost of healthcare. In Alabama, we have already started engaging in conversations with President Trump and incoming Health and Human Services Secretary Tom Price. We are closely monitoring Congress as they work to repeal and replace the Affordable Care Act,” he said. “As the federal government works with states to help develop a plan, in Alabama, we will continue to support RCOs because we feel it’s the best plan for the state.”

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Posted in: Medicaid

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Alabama Medicaid Pushes RCO Start Date to October 2017

Alabama Medicaid Pushes RCO Start Date to October 2017

The State of Alabama’s shift to managed care has been long in the works, and it looks as though the wait will be a little longer before the regional care organizations will be officially operational, according to the Alabama Medicaid Agency.

While Gov. Robert Bentley has said repeatedly that he remains committed to moving forward with the RCO system, earlier this week he admitted that there are too many questions and not enough answers to allow the system to become effective this summer as originally planned.

“The election changed things, but I think long-term funding is the real issue,” Gov. Bentley said. “I believe a managed care system based on outcomes rather than on fee-for-service is the best way to go for our Medicaid patients.”

Alabama has been working since 2013 toward a managed care system that would shift some of the state’s 1 million Medicaid patients to care through the RCO system, ensuring patients receive check-ups and preventive care while limiting expensive ER visits later on.

Also earlier this week, Alabama Medicaid issued clarification regarding reimbursement by RCOs for services provided to RCO Enrollees by out-of-network providers. This guidance only applies to the populations and the services included in the RCOs. For a listing of the populations and services included in the RCO please visit the Medicaid website.

Posted in: Medicaid

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RCO Implementation Changes and Service Delivery Network Timelines

RCO Implementation Changes and Service Delivery Network Timelines

The Alabama Medicaid Agency is working with Centers for Medicare and Medicaid Services to amend the approved 1115 waiver to allow for an Oct. 1, 2017, start date for the Regional Care Organization program.

The deadline for probationary RCOs to demonstrate the existence of an adequate service delivery network by submitting to Medicaid signed contracts from their network providers is Jan. 10, 2017. As probationary RCOs work to meet this service delivery network adequacy deadline, providers may be contacted by probationary RCOs with whom they are not currently contracted.

Information about RCOs, implementation or other aspects of this managed care program may be found on the Agency’s RCO webpage

Posted in: Medicaid

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The New Capitated System: How Do Physicians Respond?

Doctor with female patient

Editor’s Note: This article was originally published in the 2015 Winter Issue of Alabama Medicine magazine

On May 17, 2013, Gov. Robert Bentley signed into law Act 2013-261, Ala. Code Sections 22-6-150 et seq., which changes the Alabama Medicaid System from a fee-for-service to a managed care program (the “Act”). This will dramatically change the way nearly 1 million Alabama Medicaid beneficiaries receive their care, and change the way providers are paid. The Alabama Medicaid Agency will allocate a fixed, capitated per-member per-month payment to newly formed regional care organizations (“RCOs”) in return for the RCOs providing health care services to the Medicaid beneficiaries assigned to the RCO. The RCOs will provide the health care services through physicians and other health care providers who enter into provider agreements with the RCOs.

Each RCO is required to establish a network of health care providers in order to deliver care to its enrollees. The network can include physicians, hospitals, pharmacies, podiatrists, chiropractors, psychologists, dentists, therapists, social workers, rural health clinics and other health care providers. RCOs do not have to directly contract with providers, but can also contract with a managed care organization that will contract with providers. Under the law, RCOs are required to contract with any willing physician, hospital or other provider to offer services to beneficiaries in the RCO region if the provider is willing to accept the same payment and contract terms offered by the RCO to other comparable providers.

RCOs can pay providers either on a fee-for-service basis or on a capitated basis. In addition, RCOs can implement value, performance and other payment methodologies. If a RCO decides to not credential a provider in its network, the RCO must give the provider written notice of the reason for its decision, and follow credentialing requirements set out in federal regulations.

There are now 11 organizations across the State of Alabama that have been granted probationary certification as Medicaid Regional Care Organizations or “RCO”s. Physicians have begun receiving notices from some of these RCOs asking them to return a letter of intent to participate in the RCO network of providers. RCOs must be able to demonstrate to the Medicaid Agency that they have an adequate provider network in place by April 1, 2015. The RCOs are now on a fast track to put together the Primary Care Networks, and will be sending provider contracts out later this year. This will be the time physicians and other providers will be negotiating with the RCOs for the best agreement they can get.

The letters of intent being sent out are non-binding on physicians, and merely acknowledge the physician is willing to negotiate with the RCO. However, the issuance of the letters of intent by the RCOs may trigger discussions among physicians that may have antitrust implications. While a physician who simply sends in a letter of intent is acting individually, and without antitrust issues, if that physician begins discussing with other physicians whether or not the physicians should send letters of intent, the physicians involved in the discussions may be deemed to be acting collectively, and antitrust issues arise.

Under antitrust laws, physicians are considered horizontal competitors who compete with each other for patients just as car dealers are horizontal competitors who compete for customers. Any distinction in the law for professions has long been abandoned. Violations of the antitrust laws carry very severe penalties including potential criminal prosecution, trebled damages and an award of the plaintiff’s attorney fees. The enormous legal fees involved in defending an antitrust investigation by the Department of Justice or the Federal Trade Commission alone can be devastating to a physician practice.

To protect physicians who negotiate with RCOs, the Act provides immunity from liability under the antitrust laws by putting these negotiations under an exemption to antitrust known as the “State Action Doctrine.” This doctrine is set forth by the U.S. Supreme Court and exempts actions of a state from application of the antitrust laws. To qualify for the exemption, the state must clearly articulate and express a state policy to exempt the anticompetitive conduct and then actively supervise the anticompetitive conduct. The most difficult prong of the two-part test to meet is the requirement of active state supervision. The Medical Association of the State of Alabama has worked with the officials and attorneys for the Medicaid Agency to give physicians the maximum protection possible from the potential violation of the antitrust laws. It will be up to individual physicians and other providers, however, to assure they understand and follow to the letter the Medicaid Regulations designed to allow the Medicaid Agency to supervise the collective negotiations. Failure to do so can remove the antitrust immunity provided by the Act and leave the physicians and other providers vulnerable to the sanctions of the antitrust laws.

If carefully followed, the Act and the Medicaid Regulations provide the necessary elements to exempt collective negotiations from antitrust liability. Before talking with other physicians about the pros and cons of contracting with a Medicaid RCO, physicians should apply through an online process to the Medicaid Agency for a Certificate to Collaborate (the “Certificate”). The electronic application is available at Once the application is approved, a Certificate will be issued which will allow for collective negotiation, bargaining, and cooperation regarding payment and health care delivery. Careful attention must be paid to the Medicaid Regulations to assure the Certificate to Collaborate continues in force. To satisfy the State Action Doctrine, it is required the active state supervision be continuous, so just getting the Certificate alone is not sufficient. The Medicaid Regulations provide for continual monitoring and supervision of the negotiation process. Physicians and other providers must have someone in their offices knowledgeable of the requirements, and carefully assuring that they are followed.

In addition, the State Action Doctrine immunity only applies to collective negotiations with regard to Medicaid. It does not immunize any collective actions regarding private insurance companies or health maintenance organizations. Care must be taken to assure that the negotiations are limited to Medicaid beneficiaries.

The Certificate is not necessary for physicians to attend informational sessions on the new system, but is necessary for physicians to discuss among themselves whether or not to participate or on what terms to participate.Now is the time for physicians to get their Certificates, as the provider contracts will be next on the agenda for the RCOs. In all likelihood, physicians in the different regions who jointly negotiate with the RCOs either solely as physicians or in collaboration with one or more hospitals will be in

Now is the time for physicians to get their Certificates, as the provider contracts will be next on the agenda for the RCOs. In all likelihood, physicians in the different regions who jointly negotiate with the RCOs either solely as physicians or in collaboration with one or more hospitals will be in position to get better contracts than those who individually negotiate. The antitrust immunities in the Act give physicians and other providers greater ability to join together in new organizations to negotiate with RCOs and provide care to their enrollees.

Independent Practice Associations (“IPAs”), Preferred Provider Organizations (“PPOs”) and Physician Hospital Organizations (“PHOs”) are examples of the types of entities that will regain popularity in the development of the new provider networks. With the antitrust immunities furnished by the Act IPAs, PPOs and PHOs, as well as other entities, will be effective means for physicians and other providers to join together collectively and negotiate with RCOs. IPAs are entities in which physicians can integrate either partially or fully their practices into a separate entity that will negotiate with the RCOs and actually provide the care to enrollees of the RCO. PPOs are entities physicians can form to negotiate with RCOs for fees to be paid to the physicians but do not provide the care to enrollees. Care is provided through the individual medical practices. PHOs separate entities formed by hospitals and members of their medical staffs to negotiate and provide both hospital and physician services to enrollees.

The Act is changing the landscape for the provision of health care services for Medicaid beneficiaries. Other articles will deal with topics to help physicians negotiate the changes, including terms to carefully consider in signing provider contracts. Needless to say, as the time grows closer, physicians and other providers will be discussing options and strategies for responding to the changes.

bronzemvpArticle contributed by John T. Mooresmith, Esq., Burr Forman, LLP. Burr Forman, LLP, is an official Bronze Partner of the Medical Association.


Posted in: Legal Watch

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