HB361 Alabama 2016 Session

Summary

Primary Sponsor

John F. Knight Jr

Democrat

Session

Regular Session 2016

Title

Medicaid Regional Care Organizations, administrative costs paid by Medicaid limited, Sec. 22-6-153 am'd.

Summary

HB361 would cap the administrative costs paid to Medicaid regional care organizations and establish a comprehensive framework for contracts, payments, oversight, and beneficiary protections.

What This Bill Does

If enacted, the bill would limit administrative costs paid to regional care organizations to the average administrative cost of the Alabama Medicaid Agency over the last five fiscal years, subject to federal CMS approval. It would require the Medicaid Agency to contract with at least one regional care organization in each region (and possibly more) and to set capitated payments. It would establish minimum provider reimbursements at the current Medicaid fee-for-service rate unless otherwise agreed, require adequate care networks, and have rates reviewed by actuarial means and approved by CMS. It also creates detailed procedures for grievances and appeals for enrollees and providers, plus contract dispute processes and annual financial audits to ensure proper oversight and continued eligibility for federal funding.

Who It Affects

• Medicaid beneficiaries (enrollees) in Alabama: may be assigned to or choose a regional care organization and gain new rights to appeals and grievances regarding care and billing.
• Medicaid regional care organizations and participating healthcare providers: face a cap on the administrative costs they can receive, must build networks, negotiate rates, and follow new grievance, appeal, and audit procedures.

Key Provisions

• Administrative costs paid to regional care organizations may not exceed the Alabama Medicaid Agency's average administrative costs over the last five fiscal years, pending CMS approval.
• The Medicaid Agency must contract with at least one regional care organization per region (and may contract with more than one) and set capitation payments to those organizations.
• Beneficiaries are enrolled into regional care organizations; they may choose among multiple organizations, or be assigned if they do not choose.
• Regional care organizations must provide Medicaid services with a certified network; minimum provider reimbursement equals the Medicaid fee-for-service rate unless otherwise agreed; rates must be actuarially sound and submitted to CMS for approval.
• The bill creates procedures to protect against wrongful denial of claims and outlines a multi-step grievance and appeal process (medical director, peer review, Medicaid Agency appeal, and circuit court options) with decisions binding on the RCOs.
• Provider contract disputes can be reviewed by a contract dispute committee with a de novo standard of fairness, and decisions are binding on the parties; disputes can be appealed to Montgomery County Circuit Court.
• The Medicaid Agency must establish certification criteria for RCOs, quality standards, service network requirements, quality assurance, health IT and data analytics requirements, and conduct financial audits at least every three years.
• All costs related to establishing and implementing the grievance procedures and hearings are borne by the Medicaid Agency, and the agency must take actions to ensure compliance with federal rules to maintain federal matching funds.
• The act becomes effective immediately upon passage and governor’s approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Medicaid