Why was Oklahoma one of only six states selected for this grant?  There are two programs that uniquely position Oklahoma as an innovator of health care information technology:  Insure Oklahoma (IO) and SoonerCare online enrollment (OE).  Online enrollment for SoonerCare, the state’s Medicaid program, went live in September 2010 and has already dramatically improved the efficiency of the application process.  Applicants input required information on family members, income, etc. into a web-based interface, and their eligibility is determined in real-time (subject to verification). Three months after online enrollment launched, only 7 percent of SoonerCare applications were paper.  OK Policy blogged about the launch of online enrollment and the resulting national accolades this past December.

In 2005, Insure Oklahoma (IO) became the state’s first premium assistance program.  IO currently offers coverage to employees of small businesses through employer sponsored coverage, and directly to individuals who are unemployed, self-employed, or working for an Oklahoma business that doesn’t offer insurance.  The IO program is the first step to establishing a state-wide exchange, when coupled with advances in online enrollment automation, Oklahoma is years ahead of other states in readiness to launch an insurance exchange.

One of the first tasks for the Early Innovator grant will be a ‘gap analysis’, an assessment of the capacity of the state’s current technology infrastructure.  Once current capacity is mapped, it will be measured against what the state needs to build and operate an effective Exchange.  For instance, OHCA already operates a call center to handle inquiries for IO and SoonerCare, but the capacity of the call center will need to be expanded to handle the call volume of a new insurance Exchange that will serve hundreds of thousands of additional consumers.

The goal is for the Exchange to serve as a one-stop shop for all of a household’s health care needs.  A single web-based portal for citizens to access affordable private insurance and determine their eligibility for public assistance like breast and cervical cancer screening, services for persons with disabilities, or dental care for children.  Currently, those programs listed are provided by three different state agencies.  When the insurance Exchange goes online in 2014, they will be accessible through one internet site, alongside an insurance marketplace where private plans can be bought and sold.

Building this single portal is no easy task, especially when you consider the constantly changing needs of each household.  As citizens move from job to job, get married, have children, and age, their health care needs and eligibility for public assistance changes too.  The Exchange IT system must be interoperable and integrated so consumers can easily make changes, i.e. switch from Medicaid to private insurance or vice-versa.

In addition, the Exchange will be built with the security needed to protect consumer information, obstruct fraud, and comply with the Health Insurance Portability and Accountability Act (HIPAA).  The online provider directory used by IO and SoonerCare will be upgraded to a universal provider directory, a state-wide database of doctors searchable by location, gender, and specialty.  For the full Early Innovator grant proposal including all the proposed system upgrades, click here.

Once the basic infrastructure upgrades are made, there are innumerable and creative ways that businesses, consumers, providers and state agencies can use these tools to improve care.  For example, North Carolina has used upgrades to their Medicaid information system to help doctors make wiser patient treatment decisions.  As doctors and hospitals submit claims information to the state, they receive periodic reports back from the system that reveal how their treatment and prescription choices compare to other doctors treating the same kinds of patients right down the street and in other parts of the state.  Providers can use that information to make sure they are not falling behind, or getting ahead, of the standard of and cost of care in their specialty area and geographic location.

Improving the quality of health care, and reducing long-term costs for the consumer, require large up-front investments in infrastructure.  This money represents an opportunity for Oklahoma not just to be a leader and example for other states, but to facilitate relationships between consumers and private sector providers that will guarantee the long term health of its citizens and the profitability of its businesses.

For more information, check out our ongoing series examining the Affordable Care Act, including previous posts on long term care and consumer protections for preexisting conditions. You can also visit the health care reform page on our website for more resources and information.  If you have thoughts on health care reform, we encourage you to comment below or contribute a guest blog.

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One of the most important provisions of the federal health care reform law, officially known as the Affordable Care Act (ACA), is the requirement that states establish private insurance marketplaces, or ‘Exchanges’, to sell plans to individuals and small groups in their state.  Health insurance exchanges were written into the law to ensure that these particularly vulnerable segments of the market – individuals and small groups – could obtain affordable coverage.  What is unique about these segments?  Well, consider how insurance works for a large group employer:  every employee is covered regardless of medical history and all employees pay roughly the same premiums.  This is possible, and perhaps more importantly profitable, because the risk of covering the sicker/costlier employees is offset by the ease of covering healthier/cheaper employees.

Now consider how insurance works in the individual and small group market:  currently, when you shop for insurance for yourself, or a handful of employees, you pay a much higher premium and have fewer plan options.  Why?  The insurance company does not have that larger pool of people to spread out the risk that you or your employees will be the sick/costly type.  This is exactly the problem exchanges are designed to remedy.  Exchanges enable individual and small group consumers in a state to pool their buying power and create a marketplace to negotiate with insurers for higher quality lower cost coverage, just like a large employer.

Exchanges, available in 2014, will provide information to consumers about each participating plan’s benefits, pricing, and eligibility.  It’s important to note that most of the plans offered on the Exchanges will be sold and administered by private insurers – the state’s role is to host and regulate the marketplace. Participation in the insurance exchange is voluntary; consumers can still choose to buy directly from an insurance company, through a broker, or through their employer, when available.  However, for those income-eligible for premium subsidies, the online Exchanges are expected to serve as the primary venue for determining eligibility and accessing those subsidies to buy insurance.

The states have significant discretion in setting standards for a plan’s inclusion in the online Exchanges, although the federal government has set minimum requirements.  For instance, insurance policies must cover ‘essential health benefits’, defined by the ACA to include at least the following:

ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

The ACA also requires that Exchanges be equipped with consumer-friendly features like a web portal, a toll-free assistance hotline, and an online coverage cost calculator.  Insurers must offer specified tiers of coverage presented in a standardized way to maximize comparability.  The Department of Health and Human Services explains how this requirement builds on existing online private insurance infrastructure:

All or virtually all of the information needed for the web portal is standard information that is already made available to individuals, insurance agents, or existing IT contractors with pricing engines and other entities that sell or otherwise provide health insurance to individuals and small groups. For example, information on deductibles, coverage, cost-sharing, and catastrophic protection limits is routinely available on all or virtually all insurance available to individuals or small groups. Nothing in this rule requires preparation of entirely new information. In essence, we simply require that relatively comprehensive information be provided in standardized formats so that plan comparisons can be automated in ways that present comparable information in comparable levels of detail to facilitate consumer understanding of available choices.

The Oklahoma Department of Mental Health & Substance Abuse Services received a $1 million dollar planning grant to begin developing Oklahoma’s Exchange.  The second Oklahoma Health Insurance Exchange public stakeholder meeting was held in late January in Oklahoma City.  The Exchange Project Managers are soliciting participation from stakeholders and have set up seven work groups, each tasked with a different aspect of exchange planning, including Governance & Administrative Structure; Enrollment; Eligibility Process & Infrastructure; Information Technology (IT); Carrier & Plan Selection; Financial Management & Premium Development, and Education and Marketing.

Considerably more funding for developing the Exchange may be on its way – Oklahoma is in contention to be one of five states that will receive an Early Innovators Grant, a grant to reward states that demonstrate leadership in developing cutting-edge technologies for insurance eligibility and enrollment.  The Oklahoma Health Care Authority (OHCA) has requested $54 million for a two-year project – the Oklahoma Health Infrastructure and Exchange Project (OHIEP) – to invest in developing the states health insurance technology infrastructure.

Even as legal and political challenges have left the future course of health care reform implementation in question, Oklahoma, like most states, seems determined to press ahead with putting a health insurance Exchange in place.  In addition to the grants received and work being done on Exchanges by OHCA, Senator Bill Brown (R) has introduced SB 960, “to create a health insurance exchange to facilitate the purchase of individual and small group health coverage within the state.”  In large part, Oklahoma policymakers are motivated by the knowledge that if states do not create their own exchanges, the ACA enables the federal government to step in and run a non-compliant state’s Exchange for them. Oklahoma policymakers seem committed to retaining control over the important policy choices involved in designing and operating the exchanges – even if that means that the hostile rhetoric about the new law coming from some elected officials ends up at odds with the real and important implementation work that is underway at the administrative level.

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I was at a national conference of health care policy experts and advocates last month when the morning’s plenary speaker, Cindy Mann, Medicaid Director for the Centers for Medicare and Medicaid Services, posed that ominous question. “Uh-oh. What have we done this time?”, I wondered, as I tentatively lifted my hand.  But this time, Oklahoma was being singled out for major praise, not ridicule. What Oklahoma had done that had Mann and several others at the conference gushing was launch a new streamlined enrollment system for the Medicaid program that may be the most user-friendly in the nation – and that positions Oklahoma at the front of the pack as states face the challenges and opportunities of implementing health care reform in the coming years.

Until the launch of the new enrollment system, applicants for SoonerCare health insurance coverage, the state’s Medicaid program, submitted a paper application to the Oklahoma Department of Human Services (DHS) during regular office working hours. In most cases an eligibility determination would be made 20 to 30 days later after information was entered into the agency’s legacy mainframe computer and verified. Policies and procedures were handled at least slightly differently in each county office and by each caseworker, and the client numbering and tracking system was prone to errors.

The new online enrollment system, which is now operated by the Oklahoma Health Care Authority (OHCA), simplifies, standardizes, and expedites the process. Individuals can apply at any time from any computer, either on their own or with the assistance of trained community or state agency partners (For the computer-shy, paper applications may still be submitted). As with an online tax return, the process is logic-driven and rules-based, ensuring that applicants provide all required information on family members, income, health status, and the like needed to make a determination. After the application is completed and submitted, eligibility is determined in real-time and those found to be eligible are enrolled in the program immediately and automatically (contingent on some follow-up verification of information). Once they are enrolled, applicants can review their status and update their information online at any time, in many cases doing away with the need for the state to send out annual eligibility redetermination letters. This process empowers and equips the applicants/members to control their own household data.

The online enrollment system has been in development since late 2007; after data on all current recipients – some 700,000 individuals – was transferred over from the old system, the new system launched September 7, 2010. When I spoke with Richard Evans, OHCA’s Eligibility Automation and Data Integrity Manager (a title itself in need of some streamlining), he reported that since the system’s launch, more than half of new applications have come directly through the online enrollment system; the remainder are part of a common benefits application submitted to the Oklahoma Department of Human Services. One limitation of the new system: While SoonerCare applicants are informed that they may be eligible for benefits administered by DHS, such as food stamps or child care subsidies, and provided information on how to apply, OHCA and DHS are not directly sharing and transferring data.

The new system moves Oklahoma towards a single comprehensive application for public medical programs. Currently, the online enrollment system is able to process SoonerCare applications for children, families, and pregnant women, as well as for adults who may be eligible only for family planning or behavioral health services in a single application. The scheduled Phase II  online enrollment would expand the application to include the Oklahoma Care program, which provides coverage for Breast and Cervical Cancer, the Insure Oklahoma premium assistance program, and the WIC nutrition program administered by the state Health Department.

As the national attention at my conference indicates, the new system puts Oklahoma out in front among states in creating a simplified, integrated and consumer-controlled enrollment process. It should also put Oklahoma in an ideal situation for moving forward with health care reform. Under the Affordable Care Act, states will have primary responsibility for creating integrated, consumer-focused systems to determine whether low- and moderate-income families are eligible for coverage under Medicaid (which will be expanded to include all adults up to 133 percent of the federal poverty level) or for tax credits to purchase private policies through the new Health Insurance Exchanges beginning in 2014. As Tricia Brooks discussed in this recent blog post, the federal government is committing significant resources to helping states develop enhanced eligibility systems that will be up to the task. Soon the federal government will select five states for Innovator Grants to design and implement the IT  infrastructure needed to operate Health Insurance Exchanges – bolstered by 100 percent federal funding. Based on the progress the state has already made with online enrollment, Oklahoma is believed to be a leading candidate to be one of the five successful states – assuming the new Governor and her administration sign off on the application. If Oklahoma does become a model for integrated and simplified enrollment across health care programs, many more of us may be quicker to raise our hands when Oklahoma is mentioned in national meetings in the years ahead.

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At recent legislative hearings, the agency outlined next year’s budget situation. This year, the agency’s state funding – after budget cuts and including $33 million in additional funds that were authorized as part of the mid-year “supplemental” approved by the Legislature – is $980 million. As a result of increased enrollment and utilization, OHCA estimates that it will need $1.098 billion in state appropriations to maintain the Medicaid program in FY ’11 at its current levels. If, as is possible, the Legislature were to remove the supplemental from OHCA’s base and cut funding by an additional 10 percent, its appropriation for FY ’11 would be some $850 million. Thus, OHCA anticipates that it could be facing a shortfall for the coming year of some $250 million in state funds. With the corresponding loss of federal matching funds, the program would face the challenge of enacting total cuts of at least $1 billion.

The agency faces a very limited range of options for addressing funding shortfalls. As a result of the maintenance-of-effort provisions in the federal Recovery Act and the new federal health care law, the state is precluded from adopting more restrictive eligibility standards for Medicaid than were in effect as of July 2008.  Similarly, states participating in Medicaid must cover a comprehensive set of benefits for children and certain benefits for adults, including hospital and nursing home care.

The only options on the table, then, are the elimination of optional benefits for adults and cuts to provider reimbursement rates. To address mid-year revenue shortfalls during the current budget year, OHCA  reduced coverage of optional benefits and adopted stricter limits on access to prescription drugs and behavioral health services. It also cut provider reimbursement rates by 3.25 percent effective April 1st.

What more can OHCA do? The options it presented if faced with an additional 10 percent cut for FY ’11 included:

• Doing away with all optional adult benefits, including prescription drug coverage ($55.5 million in reduced expenditures), behavioral health services ($12.3 million), durable mental equipment ($12.4 million), dental care ($6.4 million), end state renal disease treatment (4.9 million), and others,  for a total “savings” of $92.5 million; AND
• A provider rate reduction of 19 percent ($162.5 million).

OHCA clearly acknowledges that these cuts would cause far-ranging harm. Eliminating such core medical benefits as prescription drugs, behavioral health services, diabetes supplies, and kidney dialysis treatment will severely impact the medical condition of tens of thousands of low-income adult Oklahomans without providing any real budgetary savings as more people turn to hospitals and nursing home for care.  Cuts in provider rates approaching anywhere near 19 percent would lead some health care providers to stop seeing Medicaid patients (OHCA cites a survey that found that more than two-thirds of physicians said they would stop seeing Medicaid patients if rates are cut 10 percent) and drive some practitioners, businesses, and facilities out of business entirely.  This would have a serious impact on the access to timely and appropriate health care for the entire Medicaid population, and potentially, all Oklahomans. Meanwhile, the lost jobs, income, and tax revenues that would be caused by these cuts in state spending – with their concurrent loss of $3 federal for every $1 cut in state funding- would have an enormous economic impact on businesses, communities, and local governments across the state.

Overall, major cuts to Medicaid would weaken health care for this entire population, and adults with chronic health conditions in particular, threaten the economic viability of the state’s health care infrastructure, and likely only shift costs to other lines in the state budget. But as we argued last month, “closing the budget gap through an exclusive reliance on deeper cuts is a choice, not an inevitability.” The alternative is to find other revenue sources. We continue to hope our elected leaders will make the right choice.

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The Oklahoma Legislature has made several efforts in recent years to chip away at the number of uninsured by expanding eligibility for Insure Oklahoma, a program that provides public subsidies towards the purchase of employer-sponsored coverage for employees of small businesses or a public product for those without access to employer coverage. Eligibility for Insure Oklahoma goes up to 200 percent of the federal poverty level ($44,000 for a family of four) and is available to employees of businesses with up to 250 employees.

Back in 2007, the Oklahoma Legislature passed the All Kids Act (SB 424), that aimed to expand access to health insurance coverage for children in low- and moderate-income working families.  The bill offered subsidized coverage in the Insure Oklahoma program for children 18 years of age or younger with family income between 185 percent of the federal poverty level – the current income threshold for the Medicaid program – and 300 percent .  The bill included an $8 million  set-aside from Insure Oklahoma revenues to help pay for coverage for an estimated 20,000 children. In 2007 and 2008, the Legislature also approved expansions of Insure Oklahomans to new categories of adults, including those with incomes up to 250 percent of poverty, employees of businesses up to 500 employees, and foster parents regardless of the size of their employer.

All that was left to do was for the Oklahoma Health Care Authority secure federal approval for the amendments to the state’s SoonerCare and Insure Oklahoma waivers that would allow for the expanded coverage. How long could that take, right? As it turned out, it wasn’t until this past December, after two-and-a-half long years of negotiations, discussions, revisions, and waits,  that CMS (the Centers for Medicare and Medicaid Services) finally informed OHCA that the amendments had been approved to the applications for both children and adults.

Despite the delays associated with the lengthy approval process, OHCA has indicated that it intends to implement the expansion slowly and gradually.  Beginning in October, enrollment in Insure Oklahoma will be opened to children between 185 and 200 percent of the federal poverty level whose parents are already enrolled in Insure Oklahoma. OHCA estimates that 3,000 children could gain coverage during this initial phase.  No date has been set to open up enrollment for children above 200 percent of poverty or to those with parents not enrolled in Insure Oklahoma. Similarly, OHCA has not set a timeline for expanding enrollment for adults in categories that have now received federal approval for coverage in Insure Oklahoma.

The cautious approach is explained as due to both systems implementation issues and to uncertainty about the ongoing availability of funding to cover the expansion. Insure Oklahoma is funded through a portion of the increased tobacco tax collections approved by voters in 2004. In FY ’09, OHCA was allocated $45 million for Insure Oklahoma. For several years, the program accumulated large surpluses as enrollment lagged. However, enrollment nearly doubled in 2009; with 30,314 participants as of February 2010, the program is approaching the level where annual revenues will only match expenditures on an ongoing basis. At that point, OHCA anticipates imposing a cap and waiting list on new enrollment.

The agency’s cautious approach to expanding eligibility without additional revenues is understandable, especially given the fraught fiscal outlook for the state as a whole, and the Medicaid program in particular, over the next few years.  The problem is really one only the Legislature can resolve. Expanding coverage to new categories of uninsured children and adults was the right commitment to make. Now it’s time to fund the commitment.

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SoonerCare has undergone many changes over its history. Perhaps most significantly, the program’s initial experiment of serving Medicaid recipients in the urban catchment areas of Oklahoma City, Tulsa, and Lawton through fully-capitated HMOs was abandoned at the end of 2003 after the program was unable to retain an adequate number of managed care organizations. Since then, all SoonerCare clients statewide have been served through a partially-capitated primary care physician (PCP) model, with OHCA itself assuming many of the case management and coordination functions previously contracted out to the HMOs (Medicare dual eligibles, foster care children, and other select populations remain in the traditional fee-for-service program).

The report is valuable reading for anyone looking to understand the recent history of the state’s Medicaid program. While identifying ongoing problems, Mathematica unambiguously asserts that “SoonerCare has contributed to improvements in access to care for low-income Oklahomans”.  The program is applauded for improving coverage for children (although the Legislature played a key role in expanding coverage to 185 percent of the poverty level in 1997, along with subsequent expansions),  restraining costs, growing the Medicaid provider network, and delivering customer satisfaction. OHCA itself is applauded for developing a culture of  innovation and strategic planning,  emphasizing performance monitoring and reporting, and displaying a commitment to public reporting and accountability (through such mechanisms as its monthly Fast Facts). The evaluators are more critical of OHCA’s success in collaborating with other public agencies and communicating with the Legislature.

Perhaps the most interesting finding of the evaluation (p. 16 of the Executive Summary) concerns what happened when OHCA assumed responsibility for managing the care of SoonerCare recipients who had previously been enrolled in commercial HMOs. The state, it turned out, was able to provide care at less cost with no decline in quality of care:

With sufficient resources and leadership commitment, state Medicaid agencies can manage care at lower costs than MCOs and with similar outcomes. Annual per-member costs in Oklahoma have been significantly below the national average for every year between 1996 and 2005, and in most cases below the average of states operating MCOs. Given the cost trajectory of Oklahoma’s MCO contracts, and the limited competition that existed between companies at the time that the Plus [fully-capitated managed care] program was terminated, it seems likely that SoonerCare would have been more costly to operate during the past four years had those contracts been maintained. Evidence from this evaluation suggests that provider participation and member outcomes have not been adversely affected as a result of the statewide expansion of SoonerCare Choice and termination of the MCO contracts, though we did find some evidence that preventable hospitalizations for diabetes and asthma may have increased. In states such as Oklahoma, where managed care penetration is low and turnover among MCOs is relatively high, MCOs’ key advantage — utilizing resources more flexibly – may have limited effectiveness in achieving better outcomes….The growing concentration of Medicaid managed care interest and capabilities in a relatively small number of multi-state private MCOs has prompted many states to look at state-managed PCCM, care management, and disease management programs as potential alternatives. Oklahoma has demonstrated that such programs have the potential to produce results that are as good as those produced by private MCOs, and perhaps better, if state Medicaid agencies have the necessary resources and a commitment to truly manage care.

As the national debate on health care reform heats up, with particular controversy focused on whether to provide consumers the choice of a publicly-operated product competing with private insurance plans, Oklahoma’s experience may have national relevance.

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