Oklahoma State Medical Association to challenge state’s Medicaid managed-care program

The Oklahoma State Medical Association on Tuesday said it plans to seek a court injunction against the state’s recently announced $2.1 billion Medicaid managed-care program.

The association plans to challenge the Oklahoma Health Care Authority’s decision to allow UnitedHealthcare, Blue Cross and Blue Shield of Oklahoma, Humana Healthy Horizons and Centene Corp. subsidiary Oklahoma Complete Health to manage Medicaid benefits for the state’s 903,000 enrollees come Oct. 1. The initiative, named SoonerSelect, covers lower-income adults, Temporary Assistance for Needy Families and the Children’s Health Insurance Program.

The group said it takes issue with private companies operating the state’s Medicaid program, rather than the Health Care Authority. Through SoonerSelect, the state will pay private insurers under a capitated payment model, offering payers a set fee per enrollee to coordinate care and allowing payers to elect how they reimburse providers. The Oklahoma Health Care Authority currently reimburses providers through a fee-for-service model.

Under its recently expanded Medicaid program, the Oklahoma Department of Insurance said an additional 200,000 adult beneficiaries meet income eligibility requirements for coverage.

Dr. Woody Jenkins, co-chair of the association’s rural section, said he worried that private insurers would charge inflated fees to cover their high administrative costs, increasing patient care price and disproportionately impacting rural patients. He said administrative costs at the Oklahoma Health Care Authority currently run at 5%, while administrative expenses at managed-care companies in other states reach at least 15%.

“We all want state agencies to run more efficiently, but to date, we’ve yet to hear a good explanation of how removing billions of dollars from the Health Care Authority and sending it to largely out-of-state private companies can achieve this goal,” Jenkins said in a statement.

The group also takes issue with how the agency made the decision. The association said that the Oklahoma Health Authority approved the managed-care contracts, despite a lack of consent from the legislature. Dr. George Monks, president of the Oklahoma State Medical Association, called for the court to put the bids on hold until legislators make a final ruling on the managed-care program.

“Do we want to allow unelected agency boards and commissions to potentially put the state on the hook for billions of dollars in future spending without discussion and approval by the legislators who must ultimately approve the funding?” Monks said in a statement.

In a statement, the Oklahoma Health Care Authority countered that “Oklahoma law provides full authority for its development of the plan to improve the present delivery of the Oklahoma Medicaid Program to the managed-care system.”

The contracts are valid for one year, with five optional one-year extensions at the state’s discretion. StateImpact Oklahoma estimates that contracts are worth a combined $2.1 billion.

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