(a) A regional care organization shall serve only Medicaid beneficiaries in providing medical care and services.

(b) Notwithstanding any other provision of law, a regional care organization shall not be deemed an insurance company under state law.

(c)(1) A regional care organization and an organization with probationary regional care organization certification shall have a governing board of directors composed of the following members:

a. Twelve members shall be persons representing risk-bearing participants in the regional care organization or organization with probationary certification. A participant bears risk by contributing cash, capital, or other assets to the regional care organization. A participant also bears risk by contracting with the regional care organization to treat Medicaid beneficiaries at a capitated rate per beneficiary or to treat Medicaid beneficiaries even if the regional care organization does not reimburse the participant.

b. Eight members shall be persons who do not represent a risk-bearing participant in the regional care organization. Of these eight members, five members shall be medical professionals who provide care to Medicaid beneficiaries in the region. Three of these members shall be primary care physicians, one an optometrist, and one a pharmacist. One primary care physician shall be from a Federally Qualified Health Center appointed jointly by the Alabama Primary Health Care Association and the Alabama Chapter of the National Medical Association and the other two primary care physicians shall be appointed by the Medical Association of the State of Alabama, or its successor organization. The optometrist shall be appointed by the Alabama Optometric Association, or its successor organization. The pharmacist shall be appointed by the Alabama Pharmacy Association, or its successor organization. All five medical professionals shall work in the region served by the regional care organization. None of these members shall be a risk-bearing participant in the regional care organization or be an employee of a risk-bearing participant, but these members may contract with the regional care organization on a fee-for-service basis.

c. Three of the eight members shall be community representatives as follows: 1. The chair of the citizens' advisory committee established pursuant to subsection (d). 2. Another citizens' advisory committee member, elected by the committee, who is a representative of an organization that is part of the Disabilities Leadership Coalition of Alabama or Alabama Arise, or their successor organizations. 3. A business executive, nominated by a chamber of commerce in the region, who works in the region. These members may not be risk-bearing participants in the regional care organization or employees of a risk-bearing participant.

(2) A majority of the members of the board may not represent a single provider; however, this shall not apply to a regional care organization if only one entity offers to be a risk-bearing participant as defined in paragraph (c)(1)a. Any provider shall meet licensing requirements set by law, shall have a valid Medicaid provider number, and shall not otherwise be disqualified from participating in Medicare or Medicaid.

(3) The Medicaid Agency shall have the power to approve the members of the governing board and the board's structure, powers, bylaws, or other rules of procedure. No organization shall be granted probationary regional care organization certification or full regional care organization certification without approval.

(4) Any vacancy on the governing board of directors in connection with members appointed as described in subdivision (1)b. or (1)c. shall be filled by the appropriate authority as designated in this subsection. A vacancy in a board of directors' seat held by a representative of a risk-bearing participant as defined in paragraph (c)(1)a., shall be filled by the regional care organization. Notwithstanding other provisions of this subsection, the Medicaid Commissioner shall fill a board seat left vacant for at least three months.

(5) The governing board may, by resolution adopted by a majority of the directors, appoint an executive committee, which shall consist of two or more directors, who may have such authority and take such action as authorized by the governing board and consistent with state law; provided, however, any at-risk provider type shall be represented on the executive committee. The governing board shall set policy and direction for the regional care organization and the executive committee shall execute the policies established by the governing board. The governing board may also appoint such other committees as are consistent with Alabama law. All actions of the executive committee and all other committees shall be reported to the governing board. At least one member of an executive committee and any other committee shall be one of the physicians appointed to the board by the Medical Association of the State of Alabama pursuant to subsection (c)(1)b.

(6) All appointing authorities for the governing board and the executive committee shall coordinate their appointments so that diversity of gender, race, and geographical areas is reflective of the makeup of the region.

(d) A citizen's advisory committee shall advise the organization on ways the organization may be more efficient in providing quality care to Medicaid beneficiaries. In addition, an advisory committee shall carry out other functions and duties assigned to it by a regional care organization and approved by the Medicaid Agency. Each regional care organization shall have a citizens' advisory committee, as shall an organization seeking to become a regional care organization, which membership shall be inclusive and reflect the racial, gender, geographic, urban/rural, and economic diversity of the state. The committee shall meet all of the following criteria:

(1) Be selected in a method established by the organization seeking to become a regional care organization, or established by the regional care organization, and approved by the Medicaid Agency.

(2) At least 20 percent of its members shall be Medicaid beneficiaries or, if the organization has been certified as a regional care organization, at least 20 percent of its members shall be Medicaid beneficiaries enrolled in the regional care organization.

(3) Include members who are representatives of organizations that are part of the Disabilities Leadership Coalition of Alabama or Alabama Arise, or their successor organizations.

(4) Include only persons who live in the Medicaid region the organization plans to serve; or if the organization has become a regional care organization, include only persons who live in the Medicaid region served by the regional care organization. The membership of the committee shall be inclusive and reflect the racial, gender, geographic, urban/rural, and economic diversity of the region.

(5) Elect a chair.

(6) Meet at least every three months.

(e)(1) Each regional care organization shall meet minimum solvency and financial requirements as provided in this subsection. The Medicaid Agency shall require a regional care organization, as a condition of certification or continued certification, to maintain minimum financial reserves at the following levels:

a. Restricted reserves of two hundred fifty thousand dollars ($250,000) or an amount equal to 25 percent of the regional care organization's total actual or projected average monthly expenditures, whichever is greater.

b. Capital or surplus, or any combination thereof, of two million five hundred thousand dollars ($2,500,000).

(2) Instead of maintaining the financial reserves required in subdivision (1), a regional care organization that has entered into a risk contract with the Medicaid Agency may submit to the agency a written guaranty in the form of a bond issued by an insurer, in an amount equal to the financial reserves that would otherwise be required of the regional care organization under subdivision (1), to guarantee the performance of the provisions of the risk contract. The bond shall be issued by an insurer authorized in this state and approved by the Medicaid Commissioner. No assets of the regional care organization shall be pledged or encumbered for the payment of the performance bond.

(f) A regional care organization shall provide such financial reports and information as required by the Medicaid Agency.

(g) A regional care organization shall report all data as required by the Medicaid Agency, consistent with the federal Health Insurance Portability and Accountability Act (HIPAA).

(h) Each regional care organization shall create a provider standards committee which shall review and develop the performance standards and quality measures required of a provider by the regional care organization. The performance standards and quality measures shall be subject to the approval of the Medicaid Quality Assurance Committee established in Section 22-6-154. At least 60 percent of the members of the provider standards committee shall be physicians who provide care to Medicaid beneficiaries served by the regional care organization. The regional care organization medical director shall serve as chairperson of the provider standards committee. No more than 50 percent of the members shall reside in one county of the region.