By DONALD WILLIAMSON / Guest Columnist

Medicaid reform proposals now in the Alabama Legislature could help save hundreds of millions of taxpayers’ dollars and improve medical care that the agency provides to about 940,000 lower-income and disabled Alabamians.

Medicaid is vital to meet the health care needs of our citizens; however, its huge costs must be controlled.

Medicaid in 2009 accounted for an estimated 16 percent of all healthcare spending in Alabama. The agency is budgeted to spend $5.98 billion in this fiscal year, about 22 percent of all state, local and federal dollars appropriated by the Legislature for 2013.

Medicaid is taking growing portions of the state’s General Fund, from 25 percent in the 2008 fiscal year to a budgeted 35 percent this year. Many factors driving this growth are beyond our control. For instance, the number of people served by Medicaid grew from about 750,000 people in 2008 to 938,000 last year, probably because of the recession.

But we can take steps to improve care and save money.

Alabama’s Medicaid agency now has little managed care, in which a case worker, doctor, or other professional oversees and coordinates the care of a Medicaid patient to find his or her best and most efficient treatment.

Legislation sponsored by state Sen. Greg Reed, R-Jasper, and state Rep. Jim McClendon, R-Springville, would open the door to locally controlled managed care. It would let hospitals, doctors, and other Alabama health providers form groups called regional care organizations that could sign contracts to provide medical care to Medicaid beneficiaries on the state’s behalf in return for negotiated payments per beneficiary.

The near-identical Medicaid managed-care bills, Senate Bill 340 by Sen. Reed and House Bill 454 by Rep. McClendon, say that Alabama’s Medicaid agency could sign a contract with a regional care organization only if it judged that care of Medicaid beneficiaries would be better, more efficient, and less costly than existing care.

Medicaid’s actuary estimates that a managed-care system would reduce projected Medicaid spending in Alabama by $750 million to $1 billion in total Medicaid spending from fiscal year 2015-2019.

A 33-member advisory committee formed by Gov. Robert Bentley, which the Governor asked me to chair, recommended in January that Alabama be divided into regions, and that a community-led network coordinate the health care of Medicaid patients in each region.

The legislation sponsored by Sen. Reed and Rep. McClendon would help bring those recommendations to life.

Sen. Reed and Rep. McClendon have worked long hours, talking with other lawmakers and with dozens of people representing hospitals, doctors, civic coalitions, and other groups, in an effort to pass a law that would protect Medicaid patients, health-care providers, and Alabama taxpayers.

I want to thank them and Gov. Bentley for their leadership on this legislation. This legislation is the start of a journey that will result in Medicaid transformation in Alabama.

Dr. Donald Williamson is the state health officer and chair of the Alabama Medicaid Advisory Commission.