Alabama Legislative Update – Week 7: Medicaid Reform Takes the Stage as the Battle for Education Continues

by Baker Donelson

As the Alabama Legislature marked the halfway point of the 2013 Regular Session, progress continued to move at a slow pace where repercussions of the Alabama Accountability Act continue to linger in the halls of the Statehouse.

Signed Into Law

Law Enforcement Agencies Consolidated and Information Technology Position Established

Governor Robert Bentley signed two pieces of legislation to increase government efficiency: one to consolidate more than 20 state law enforcement agencies and another to appoint an Information Technology (IT) secretary to streamline the state's IT systems.

The law enforcement consolidation bill, championed by Senate President Pro Tem Del Marsh, creates an Alabama State Law Enforcement Agency, divided into a Department of Public Safety and a State Bureau of Investigations and led by a cabinet-level secretary.  Consolidation begins immediately, and is expected to be completed by January 1, 2015. Secretary of Homeland Security Spencer Collier is rumored to be the governor's choice to head the new agency.

While Governor Bentley hinted that he has someone in mind for IT secretary, he has not revealed his choice. A companion bill creating the Alabama Technology Authority has passed the Senate and is pending in the House.

Medicaid Reform Takes Center Stage

Legislators Hear Testimony on Medicaid Overhaul

Proposed legislation would change Medicaid from a fee-for-service program to a program in which private-sector contractors develop care networks in up to eight regions of the state.  The bill is sponsored by Senate Health Committee Chairman, Senator Greg Reed, and follows recommendations of the Alabama Medicaid Advisory Commission.  House Health Committee Chairman, Representative Jim McClendon, will sponsor the House version. 

The legislation, which is supported by Governor Bentley, would divide the state into eight regions for Medicaid delivery, known as regional care networks. These networks would gradually move compensation for providers from a fee-for-service model to a "capitation" model, which would pay providers based on health outcomes. Under the bill, the regions would be created by October 1, 2016, the beginning of the 2017 fiscal year. The bill includes language that would require regional care organizations to establish citizens' advisory councils. The chair of the council would sit on the organization's governing board. At least 60 percent of the chairs of the board positions would be reserved for providers.

Representatives from community groups and managed care companies told House and Senate members that the recommended reorganization is a major first step in Medicaid reform but also voiced concerns. Executives with the four patient care networks in the state asked the legislature to consider expanding their community health care efforts during any reorganization. Alabama Arise executive director Kimble Forrister said consumer advocacy groups are hoping "that consumers are involved at each step of" the legislative process. The Business Council of Alabama, Alabama Hospital Association, Alabama Nursing Home Association and Alabama Arise all support the legislation to varying degrees, although a spokesman for the Nursing Home Association expressed neutrality.  Several speakers asked officials and lawmakers to keep transportation issues for Medicaid recipients in mind.

The joint committee adjourned without taking a vote.  McClendon and Reed expect the bill to start moving through the chambers after legislators return from their spring break.

Medicaid Expansion Possible

The chairman of the House Health Committee and member of the Governor's Medicaid Advisory Commission, Representative Jim McClendon, recently stated that proposed Medicaid reforms could position Alabama to expand Medicaid and accept billions of federal dollars that would accompany an expansion. McClendon said,  "…until that happens, we can't consider (expansion)." Proponents of expansion have said it would be a mistake to walk away from the billions of dollars in federal money that is tied to expansion.  According to a study by researchers at the University of Alabama at Birmingham, expanding Medicaid could result in 250,000 new recipients and an additional $1 billion a year in federal spending for Alabama. The federal government will fund 100 percent of Medicaid expansion costs in 2014, 2015 and 2016. In 2017 and beyond, states will have to pay ten percent.

Governor Bentley has said he opposes expanding Medicaid in its current fee-for-service form.  He has not said if he would agree to expand Medicaid if it is reconfigured.

Battle Over Education

Alabama Accountability Act Back in Court

After losing its first legal battle and seeing the controversial legislation signed into law by Governor Bentley, the Alabama Education Association (AEA) filed a new lawsuit in Montgomery Circuit Court.  It alleges Republican members of a conference committee violated the Open Meetings Act and legislative operating rules when a conference committee added the tax credit program to an unrelated bill at the last minute. The Supreme Court ruled the previous challenge was premature because Governor Bentley had not signed the bill.  AEA attorney James Anderson says the issue is now ripe.

Plaintiff attorneys had sought to serve papers to named legislators over spring break, arguing that they would not be participating in legislative activities during that period.  In court filings, lawmakers maintain they cannot be served with legal documents while in session. 

After initially granting the plaintiff attorneys' request, Montgomery Circuit Judge Gene Reese certified the question for the State Supreme Court, asking whether legislators have immunity during legislative session from civil lawsuits regarding legislative issues.  He stayed the proceedings until the matter goes before the Alabama Supreme Court.

Common Core Likely Dead

After the Senate Education Committee voted to carry over a bill to repeal Common Core indefinitely, the K-12 subcommittee of the House Education Policy Committee voted to kill the bill. The Common Core standards for learning in math and English were recommended by the National Governors Association. Bills were introduced in the House and Senate to prevent adoption of the standards. The bill will be sent back to the full committee with a negative recommendation.  It can be resubmitted but is unlikely to pass.

Passed Committee

Constitutional Amendment to Strengthen "Right to Work" Makes Progress

SB 41, which proposes a constitutional amendment that, upon ratification by the voters, would affirm it is the public policy of the state of Alabama that the right of persons to work may not be denied nor diminished by an employer or a labor organization due to union membership or non-membership, received a favorable report from the House Committee on Commerce and Small Business. The bill is in now in position on the House regular calendar to be taken up for consideration.

School Calendar Bill Has One More Year

In 2012, lawmakers passed a bill that established parameters for when public schools could start and end for academic years 2012-2013 and 2013-2014.  The guidelines provide that schools start no earlier than two weeks before Labor Day and end no later than the Friday before Memorial Day. The bill was supported largely by those who said an extended summer vacation season would increase tourism on the Gulf Coast and raise more tax money for the state's education fund. Supporters included Senator Trip Pittman, chair of the Senate Education Budget Committee.  Pittman, however, has said he does not plan to push for the mandatory calendar beyond the 2013-2014 school year, when the guidelines expire. 

A bill sponsored by Senator Bill Holtzclaw would allow school systems the ability to opt out.  That legislation was so significantly changed in committee that the opt-out language was removed before the bill was passed out of committee. A House version of Holtzclaw's original bill was carried over.

As passed, the amended bill keeps language that allows schools to operate less than 180 days per year, if they extend the hours per day they are in school. Pittman said he can accept eliminating the mandatory calendar after 2013-2014 if the flexibility of hours remains.

Tax Exemption Bill Passes House Committee

The House Ways and Means Education Committee approved a red-tape reduction bill that Alabama contractors say will help simplify the tax-exemption process for many public works jobs. The bill would require the Department of Revenue to issue certificates exempting sales and use taxes for eligible contractors and subcontractors who buy material that is used in certain public works projects. If the bill becomes law, it would take effect for contracts signed October 1 or later.

Road, highway and bridge projects would not be eligible, and only contractors and subcontractors licensed by the State Licensing Board for General Contractors would be eligible. Currently, government entities that are eligible for sales and use tax exemptions issue work orders for construction material, pay for the material and then get the exemption. Purchases currently are exempt only if the governmental entity designates the contractor as a purchasing agent and pays for the material itself, the bill's fiscal note says. The bill would extend the exemption directly to eligible contractors.

Executive Order

Office of Fleet Management Created

Governor Bentley issued an executive order to create an office of fleet management for state vehicles to maximize fuel efficiency and cost-effective maintenance for the state fleet. Legislation associated with the initiative is expected.

The Alabama Legislature now stands in recess as members have left Montgomery for spring break.  The House of Representatives will convene at 1 p.m. on April 2 and Senate will convene at 1:30 p.m. the same day. The Alabama State Public Policy Team will continue to monitor all proposed and pending legislation and maintain a presence in the State House throughout the legislative session.  Should you have any questions or concerns about how the legislature's activities could affect your business, please contact Dennis Nabors in our Montgomery office or Denise Killebrew in our Birmingham office.

Written by:

Baker Donelson

Baker Donelson on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.