2015 legislative update: Alabama Legislature passes Medicaid long-term care reforms

Medicaid long-term care patients in Alabama would have more options about their care under a bill that passed the House 98-0 Thursday and went to Gov. Robert Bentley. SB 431, sponsored by Senate Majority Leader Greg Reed, R-Jasper, cleared the Senate 30-0 last week.

The plan would deliver comprehensive Medicaid long-term care services, including in-home and other community-based services and nursing home care, through one or more integrated care networks (ICNs). One goal is long-term cost control.

State Health Officer Don Williamson told legislators that the ICN system could lead more people to choose in-home care rather than nursing home placement. The legislation would remove caps on the number of Alabamians eligible to receive less costly at-home and community-based Medicaid services.

The plan would give patients more options for care while retaining the more costly nursing home option if needed. The bill would set up a managed-care health delivery system for seniors and for people with disabilities who have Medicaid coverage and meet the criteria for admission to a nursing home.

“As quietly as this bill passed, its historic significance is easy to miss,” ACPP policy director Jim Carnes said. “When these changes go into effect, it will be a new day in Alabama for patient choice and cost-effectiveness in long-term care.”

The ICN plan would be similar in structure to the regional care organizations (RCOs) into which other Medicaid patients will move. The state’s new RCO model is designed to keep patients healthier while cutting costs.

The long-term care plan was developed with input from the nursing home industry, health experts and advocates on the Medicaid Long-Term Care Workgroup, of which Arise is a member. The bill calls for each ICN to have a Citizens’ Advisory Committee that includes members nominated by Alabama Arise and a number of advocacy partners.

Pharmacy ‘privilege tax’ to help Medicaid budget approved by House committee

Most pharmacies in Alabama would pay an additional 15 cents in privilege tax on each prescription they fill or refill under HB 698, which won the approval of the House’s General Fund (GF) budget committee Thursday. Just four legislative days remain for the bill to clear the House and Senate.

Medicaid would gain about $8 million under the proposal. Rep. Elaine Beech, D-Chatom, the bill’s sponsor, said retail pharmacists agreed to pay the supplemental privilege tax as a way to help Medicaid avoid drastic service cuts. Beech’s bill excludes prescriptions for hospital patients and pharmacies operated by the state or state agencies.

Without more revenue, Williamson said, Medicaid will have little choice but to use a pharmacy benefits manager and mail-order prescription drugs to help cut costs. Many pharmacies, especially those in rural areas, depend on Medicaid prescription drug business. Pharmacies will continue to pay an existing privilege tax of 10 cents, bringing the total pharmacy tax to 25 cents per prescription if the legislation becomes law.

A similar bill sponsored by Sen. Rodger Smitherman, D-Birmingham, cleared the Senate’s GF budget committee Tuesday. SB 507 also would impose an additional privilege tax of 15 cents per prescription, but it would not exclude hospital pharmacies and state-owned pharmacies.

By M.J. Ellington, health policy analyst. Posted May 28, 2015.

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