(a) Subject to approval of the federal Centers for Medicare and Medicaid Services, the Medicaid Agency shall enter into a contract in each Medicaid region for at least one fully certified regional care organization to provide, pursuant to a risk contract under which the Medicaid Agency makes a capitated payment, medical care to Medicaid beneficiaries. However, the Medicaid Agency may enter into a contract pursuant to this section only if, in the judgment of the Medicaid Agency, care of Medicaid beneficiaries would be better, more efficient, and less costly than under the then existing care delivery system. The Medicaid Agency may contract with more than one regional care organization in a Medicaid region. Pursuant to the contract, the Medicaid Agency shall set capitation payments for the regional care organization.

(b) The Medicaid Agency shall enroll beneficiaries into regional care organizations. If more than one regional care organization operates in a Medicaid region, a Medicaid beneficiary may choose the organization to provide his or her care. If a Medicaid beneficiary does not make a choice, the Medicaid Agency shall assign the person to a care organization. Medicaid may limit the circumstances under which a Medicaid beneficiary may change care organizations.

(c) A regional care organization shall provide Medicaid services to Medicaid enrollees directly or by contract with other providers. The regional care organization shall establish an adequate medical service delivery network as determined by the Medicaid Agency. An alternate care provider contracting with Medicaid shall also establish such a network. The Medicaid Agency shall by rule, pursuant to the Alabama Administrative Procedure Act, establish the minimum reimbursement rate for providers. The minimum reimbursement rate shall be the prevailing Medicaid fee-for-service payment schedule, unless otherwise jointly agreed to by a provider and a regional care organization through a contract. The minimum provider reimbursements shall be incorporated into the actuarially sound rate development methodology for each regional care organization. The methodology and resulting rates shall be submitted to the Centers for Medicare and Medicaid Services for approval.

(d) The Medicaid Agency shall establish by rule procedures for safeguarding against wrongful denial of claims and addressing grievances of enrollees in a regional care organization or an alternate care provider. The procedures shall provide for a timely and meaningful right of appeal, by Medicaid enrollees or their providers, of approvals or denials of care, billing and payment issues, bundling matters, and the provision of health care services. The rules shall include procedures for a fair hearing on all claims or complaints brought by Medicaid enrollees or other providers that shall include the following:

(1) An immediate appeal to the medical director of the regional care organization, who shall be a primary care physician. The rules of evidence shall not apply. The medical director shall consider the materials submitted on the issue and any oral arguments and render a decision. The medical director's decision shall be binding on the regional care organization.

(2) If a patient or provider is dissatisfied with the decision of the medical director, the patient or provider may file a notice of appeal to be heard by a peer review committee. The peer review committee shall be composed of at least three physicians of the same specialty in the region in which the services or matter is at issue. If three physicians cannot be found, then the physicians may be selected outside of the region. The Medicaid Agency shall develop rules regarding the appeal to the peer review committee. The peer review committee's decision shall be binding on the regional care organization.

(3) If a patient or the provider is dissatisfied with the decision of the peer review committee, the patient or provider may file a written notice of appeal to the Medicaid Agency. The Medicaid Agency shall adopt rules governing the appeal, which shall include a full evidentiary hearing and a finding on the record. The Medicaid Agency's decision shall be binding upon the regional care organization. However, a patient or provider may file an appeal in circuit court in the county in which the patient resides, or the county in which the provider provides services.

(e) The Medicaid Agency shall by rule establish procedures for addressing grievances of regional care organizations, except as otherwise provided in subsection (g). The grievance procedure shall include an opportunity for a fair hearing before an impartial hearing officer in accordance with the Alabama Administrative Procedure Act, Chapter 22 of Title 41. The state Medicaid Commissioner shall appoint one, or more than one, hearing officer to conduct fair hearings. After each hearing, the findings and recommendations of the hearing officer shall be submitted to the commissioner, who shall make a final decision for the agency. Judicial review of the final decision of the Medicaid Agency may be sought pursuant to the Alabama Administrative Procedure Act. All costs related to development and implementation of the grievance procedure, including the provision of administrative hearings, shall be borne by the Medicaid Agency. The agency may adopt rules for implementing this subsection in accordance with the Alabama Administrative Procedure Act.

(f) All provider contracts of an organization granted probationary or final certification as a regional care organization shall be subject to review and/or approval of the Medicaid Agency.

(g)(1) If a provider is dissatisfied with any term or provision of the agreement or contract offered by a regional care organization, the provider shall:

a. Seek redress with the regional care organization. In providing redress, the regional care organization shall afford the provider a review by a panel composed of a representative of the regional care organization, the same type of provider, and a representative of the citizen's advisory board appointed by the chairman of the advisory board.

b. After seeking redress with the regional care organization, a provider or the regional care organization who remains dissatisfied may request a review of such disputed term or provision by the Medicaid Agency. The Medicaid Agency shall have 10 days to issue, in writing, its decision regarding the dispute.

c. Within 30 days of receipt of the Medicaid Agency's decision, the provider or the regional care organization may request review of the Medicaid Agency's decision by a contract dispute committee. The committee shall be appointed by the Medicaid Agency and shall be composed of two providers from other Medicaid regions, two representatives of regional care organizations from other Medicaid regions, and an administrative law judge selected by the Medicaid Agency. The two providers shall be selected by the affected provider's professional or business association, and the two representatives of the regional care organizations shall be appointed by the Medicaid Agency from a list of four representatives selected by regional care organizations from the unaffected Medicaid regions.

d. If the provider or the regional care organization is dissatisfied with the decision of the contract dispute committee, the provider or regional care organization shall file an appeal in the Montgomery County Circuit Court within 30 days of the decision.

(2) The Medicaid Agency shall develop rules regarding review of agreements and contracts by the contract dispute committee. The standard of review for the contract dispute committee shall be one of fairness and reasonableness. The contract dispute committee shall undertake a de novo review and shall consider current and historic reimbursement rates; prevailing terms and standards in contracts currently in existence; and customs, policies, and procedures prevalent in the other Medicaid regions and under the Alabama Medicaid Program. The rules shall include the requirement that the contract dispute committee issue a written ruling on such disputed term or provision stating its findings of fact and conclusions of law no more than 20 days after the dispute is submitted to it. The contract dispute committee's decision shall be binding on the regional care organization and the provider.

(h) In addition to the foregoing, the Medicaid Agency shall do all of the following:

(1) Establish by rule the criteria for probationary and full certification of regional care organizations.

(2) Establish the quality standards and minimum service delivery network requirements for regional care organizations or alternate care providers to provide care to Medicaid beneficiaries.

(3) Establish by rule and implement quality assurance provisions for each regional care organization.

(4) Adopt and implement, at its discretion, requirements for a regional care organization concerning health information technology, data analytics, quality of care, and care-quality improvement.

(5) Conduct or contract for financial audits of each regional care organization. The audits shall be based on requirements established by the Medicaid Agency by rule or established by law. The audit of each regional care organization shall be conducted at least every three years or more frequently if requested by the Medicaid Agency.

(6) Take such other action with respect to regional care organizations or alternate care providers as may be required by federal Medicaid regulations or under terms and conditions imposed by the Centers for Medicare and Medicaid Services in order to assure that payments to the regional care organizations or alternate care providers qualify for federal matching funds.