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Huntsville Hospital, Sentara Form First Medicaid 'RCO' in AL

John Commins, for HealthLeaders Media, June 16, 2014

The capitated Regional Care Organization model is designed to be responsible for all aspects of care for Medicaid recipients in 10 counties in northern Alabama. CMS approval is pending.

Huntsville Hospital Health System and Sentara Health Plans have formed a joint venture to manage a Regional Care Organization that will serve more than 120,000 Medicaid recipients in northern Alabama when it opens next year.

The capitated RCO model was approved last year by the Alabama Legislature, which created five RCO regions across the state to become operational in October, 2016. The plan has yet to gain a waiver from the federal Centers for Medicare & Medicaid Services, however.

That potential iceberg has not stopped HHHS and Norfolk, VA-based Sentara from sailing ahead to create Alabama's first not-for-profit RCO, which should be operational by October, 2015, one year ahead of the state mandate.

David Spillers, CEO of HHHS, says he's not particularly stressed about riding the leading edge of a profound change in the way care is delivered, even as the details have yet to be finalized.
 
"Hospital systems like ours have to go out and get into the population health management arena. Either we jump out there and do it, or the state is just going to bring in some commercial managed care company to do it to us," Spillers said in a telephone interview.

"I'm not so sure that is worse than taking the risks we are. In fact I'm convinced it's better to take the risk we are than to just let somebody else come in and continue to take patients out of our hospitals and not have any opportunities on the other side to make that up."

The HHHS/Sentara RCO will be responsible for all aspects of care for Medicaid recipients in 10 counties in northern Alabama. The new company will be headquartered in the Huntsville area and is expected to create about 400 new jobs in Alabama and Virginia.

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