MONTGOMERY, Ala. – Alabama Medicaid Commissioner Stephanie Azar announced the Alabama Medicaid Agency would look for new solutions for the state’s Medicaid program, abandoning a much-touted solution developed under the Bentley administration.

In a Thursday release, the commissioner said, “In light of known federal administration changes and potential congressional adjustments the Alabama Medicaid Agency will pursue an alternative to the Regional Care Organization (RCO) initiative to transform the Medicaid delivery system.”

Governor Kay Ivey (R) said in her own release, “I support Medicaid’s shift in reform strategy, which has been fully shared with legislative leadership and other key stakeholders.”

Regional Care Organizations were designed under the Bentley administration to create a bureaucracy that would oversee total care for a patient, instead of just emergency treatment, aiming to lower the total cost of administering healthcare to Medicaid patients in the state.

One frequent complaint from state lawmakers has been that they didn’t have the flexibility to manage the state’s Medicaid program, which has spiraled into a deep funding crisis. States are currently required to seek federal waivers before making many substantial changes, since the federal government covers the vast majority of the program’s cost.

The Bentley administration successfully obtained a federal waiver to implement its RCO plan, which was mandated by state law in 2013. However, it was never put into effect, and now it has been officially abandoned.

Blue Cross Blue Shield of Alabama issued a statement expressing disappointment the program will not be going forward, saying in part, “Blue Cross and My Care Alabama made a total commitment to the RCO initiative and partnership with the Medicaid Agency to achieve the goals and objectives of the project.”

Senate Minority Leader Quinton T. Ross Jr. (D-Montgomery) said, “While I support the decision to forego implementing the RCOs as our Medicaid funding model at the federal level could be in jeopardy, I will not support balancing our state budget by taking access to healthcare away from our children and our most vulnerable citizens.”

Commissioner Azar pointed to “major changes in federal regulations” and “new opportunities for state flexibility” as reasons to create a new strategy.

She notes that several probationary RCOs had already withdrawn from the program because of funding uncertainty.

“It is highly likely that federal healthcare 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.”

Governor Ivey echoed the sentiment, “I spoke with Health and Human Services Secretary Tom Price, and he has assured me of the Trump administration’s desire to work with the states to allow more flexibility in Medicaid services moving forward.”