Oklahoma adopts new Medicaid management system

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Between July 1, 2021, when Oklahoma’s Medicaid expansion took effect, and May 2022, more than 291,000 people were added to enrollment in the program. Currently, more than 1.2 million people are enrolled in Medicaid in Oklahoma. (Photo by Online Marketing on Unsplash)

OKLAHOMA CITY — After years of battling in court and on the state Capitol over how best to handle the state’s $7 billion Medicaid program, Oklahoma lawmakers and Gov. agreed on a new structure which should come into force on 1 July.

Instead of contracting with large out-of-state insurance companies to run the state’s Medicaid program, as Stitt had previously attempted to do, the new plan ensures that Oklahoma-based companies play a role in managing care for Medicaid enrollees. However, many of these locally owned entities will likely still need to partner with large out-of-state companies in order to provide services to Oklahoma’s newly expanded Medicaid population.

The new system is better than the original plan, health care providers say, though some remain suspicious about how the program will ultimately be administered.

Voters set the stage for the state to expand Medicaid eligibility to an additional 190,000 Oklahomans when they approved State Question 802 in 2020. State leaders have been scrambling to find a way to manage the $162 million increase the expansion was expected to cost.

Stitt responded by ordering the Oklahoma Health Care Authority to award $2 billion in contracts to four private companies to run the Medicaid program. Several medical groups, including the Oklahoma State Medical Association, have filed a lawsuit. The Oklahoma Supreme Court struck down the contracts in 2021, finding that Stitt lacked the authority to implement such a plan without involving the Oklahoma legislature in the process.

Health care provider groups had opposed Stitt’s managed care plan, saying the managed care approach was not working well when the state last attempted it in the 1990s. Lawmakers eventually reverted to a state-run system after the number of participating health care providers dwindled to a point that tested the state’s ability to provide adequate Medicaid services.

Providers had dropped out of the Medicaid plan because they claimed for-profit management companies, seeking to increase profits, had cut reimbursement rates and erected other reimbursement barriers that made participation untenable. Returning to a managed care system would likely lead to the same outcome, provider groups argued.

Stitt signed Senate Bill 1337 and SB 1396 on May 26, hailing the new plan as one that achieves the goals he had in mind when he pushed for managed care.

“I’ve been pushing since 2020 to find a solution that improves health outcomes for Oklahomans and also protects taxpayers from rising costs,” Stitt said.

The new plan encourages provider-run entities, such as Integris, to expand their accountable care organizations statewide, said state Rep. Marcus McEntire, R-Duncan.

“This plan puts an entity run by an Oklahoma vendor in the middle of that,” McEntire said when he presented the measures to the House. “The money will stop there, as it is.” The new system makes it easier for Oklahoma lawmakers to step in and modify the process as needed, he said.

Oklahoma-based companies will likely partner with larger national companies to secure the financial backing needed to take on the risk of exceeding the state’s spending cap, McEntire said.

Companies contracted to provide Medicaid services will need to meet measurable goals and develop strategies to address health disparities, said Traylor Rains, director of State Medicaid.

“While SB 1337 implements managed care, it is very different from what we were in January last year, when the health care authority offered contracts to insurance companies without legislative oversight or guardrails. to protect Oklahoma taxpayers’ money or our Medicaid beneficiaries,” said OSMA President David Holden. , MD

The latest version of the bill is the result of a more collaborative process that allowed hospitals and physicians to participate, Holden said.

“While we still have concerns about how this program will be implemented and administered, we appreciate the thought that has gone into this effort,” Holden said. “Going forward, the Oklahoma State Medical Association will continue to oppose any increase in administrative fees because, ultimately, it diverts taxpayer dollars from patient care.”

SB 1396, the Supplementary Compensatory Payment Program for Hospitals, provides $130 million annually for the Medicaid program and rates inpatient and outpatient hospital services at 90% of the average commercial rate.

Between July 1, 2021, when Oklahoma’s Medicaid expansion took effect, and May 2022, more than 291,000 people were added to enrollment in the program. Currently, more than 1.2 million people are enrolled in Medicaid in Oklahoma.


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