OKLAHOMA CITY – The Oklahoma Health Care Authority overstepped its bounds when it implemented a privatized managed-care plan for the state’s Medicaid program, the Oklahoma Supreme Court ruled Tuesday.
The managed-care program created by the OHCA, which it called SoonerSelect, was not authorized by the Legislature, the Supreme Court decreed in a 6-3 decision that struck down an initiative supported by Gov. Kevin Stitt.
The ruling was a victory for several health care organizations that included the Oklahoma State Medical Association, Oklahoma Dental Association, the Oklahoma Osteopathic Association, the Oklahoma Society of Anesthesiologists, and the Oklahoma Chapter American Academy of Pediatrics Inc.
The OHCA’s managed care plan “would’ve jeopardized health care for all Oklaho- mans by driving out providers of general health care, as well as dentists and specialists across the state,” said Lynn Means, executive director of the Oklahoma Dental Association. “This lawsuit was one part of a physician-led effort to ward off privatization to insurance companies and keep Oklahomans in charge of health care in Oklahoma.”
The OHCA announced late last year that it would award $2.2 billion in contracts to four insurance conglomerates to run Oklahoma’s expanded Medicaid program.
A review of the Oklahoma Health Care Authority Act and the Oklahoma Medicaid Healthcare Options Act, both enacted in 1993, “did not intend to give carte blanche authority to the OHCA to create managed care plans,” the Supreme Court justices wrote.
“We ... recognize the heart of this issue is much larger than managed care,” said Dr. Mary Clarke, president of the Oklahoma State Medical Assn. “It’s about ensuring that state agencies follow the law when spending Oklahoma’s tax dollars.” The court’s ruling “represents an important victory for transparency in government and Oklahoma taxpayers.”
‘FAR FROM OVER’
Senate Bill 131 by state Sen. Jessica Garvin and state Rep. Marcus McEntire, both Duncan Republicans, was developed in opposition to the Stitt/OHCA privatization plan and became law on May 27 without the governor’s signature.
SB 131 creates the Ensuring Access to Medicaid Act, as a compromise with the OHCA’s plan. It specifies which Medicaid populations may be required to enroll in managed care plans by the OHCA, and which populations may voluntarily enroll in managed care plans. The Authority “may only utilize an opt-in enrollment process for the voluntary enrollment of individuals in the American Indian/Alaska Native population,” the new law stipulates.
It also directs the OHCA to develop network adequacy standards for all managed care organizations and dental benefit managers.
“I’m pleased with the Court’s correct decision,” McEntire said Wednesday. However, “This is far from over and far from resolved,” he added. “Legal minds are still weighing in on this. Now we’ll see how the governor and the petitioners move on this.”
ENROLLMENT OPEN FOR NEW ELIGIBLES
The Supreme Court ruling was handed down on the same day that enrollment opened for an estimated 200,000 individuals newly eligible for Medicaid coverage.
Oklahoma voters on June 30, 2020, approved State Question 802, which expanded Medicaid coverage in the state to include low-income adults by no later than July 1, 2021. Coverage is to be extended to adults ages 19-64 whose income is 138% of the federal poverty level or lower. This equates to an estimated annual income of $17,796 for an individual or $36,588 for a family of four.
More than 967,450 low-income Oklahomans were enrolled in SoonerCare, the state’s Medicaid program, as of April 2021. Of those, 65% were individuals 18 and younger, and 35% were adults, according to the OHCA.
The U.S. Census Bureau reported that in 2017 Oklahoma had the second-highest uninsured rate in the country, at 14.2%. Only Texas was higher.
Ninety percent of the costs for Medicaid expansion enrollees will be paid by the federal government.
The state’s share of the cost of Medicaid expansion will be approximately $164 million, Representative McEntire said. A 2013 Leavitt Partners study commissioned by the state estimated the net cost would be $49 million to $81 million when anticipated savings in existing programs across state government were also considered.
‘ATTEMPT TO FIND MIDDLE GROUND’
Under the governor’s plan, the Oklahoma Health Care Authority would have surrendered administration of the state’s Medicaid program to four large insurance companies. Federal law allows those insurers to charge up to 15% in administrative expenes. By comparison, the current administrative rate using OHCA staff is less than 5%.
“Oklahomans are best served when medical decisions are made between doctor and patient, and without interference from insurance bureaucrats,” said Allison LeBoeuf, executive director of the Oklahoma Osteopathic Association.
Perhaps now “we can bring together all of the stakeholders involved in this issue and attempt to find some middle ground,” McEntire said. “Let’s slow this process down so we can make proper decisions.”
A physician who administered a managed-care vision program in Lawton for several years told the Ledger he was mystified why the State of Oklahoma would out-source its Medicaid program to out-of-state companies.
“I’m having trouble understanding how the state can save money by sending its Medicaid dollars out-of-state,” said Dr. Richard Swales, a Lawton optometrist.
“In terms of quality, there’s no reason to hire other vendors to manage Oklahoma’s Medicaid program,” he said. The Oklahoma Health Care Authority “is doing the job quite well.”
The OHCA’s cost of administering Oklahoma’s Medicaid program is about 5%, leaving 95% of the funds for Medicaid recipients, Swales said. “So why hire four out-of-state companies and pay them 15% in administrative fees?”
Furthermore, he noted, the OHCA is “providing these services through jobs that are in our state.”
The Oklahoma Health Care Authority is “doing a magnificent job” in its administration of Oklahoma’s Medicaid program, Swales said.
Swales is the president of Primary Vision Care Services. PVCS is an Oklahoma corporation that provides a vision care benefits plan called “VisionAdvantage” in this other nearby states. It is a standalone or enhancement vision care plan that offers unlimited eye care services and wholesale vision eyewear.
Its VisionAdvantage Plan uses a network of selected independent optometrists throughout Oklahoma, Texas, Arkansas, Kansas and Missouri.