Lawsuit challenges OHCA’s managed care proposal (Capitol Update)

For the past several months, the Oklahoma Health Care Authority has been in a race against the calendar to get contracts signed with private insurance companies to manage the state’s $2 billion Medicaid program before the Legislature was to go into session on Feb. 1. Last Thursday, medical organizations representing nearly all the doctors in Oklahoma filed a lawsuit in the Supreme Court asking the court to take original jurisdiction and prohibit OHCA from implementing its Medicaid managed care plan. 

I read the pleadings in the case to try to understand how viable the chances are that the agency’s actions will be set aside, or at least slowed to give the Legislature an opportunity to weigh in. It’s always dangerous to guess what a court will do, especially after reading the pleadings from only one side in the case, so I won’t. But I will say the plaintiffs in the case certainly did not waste the money they paid their lawyers. The case seems to raise issues that could prevail.

In asking the Supreme Court to take original jurisdiction, the medical organizations accuse OHCA of using the June 30, 2020, passage of State Question 802 expanding Medicaid, with its constitutional mandate to implement Medicaid expansion by July 1, 2021, “as a means to piggyback a rapid-fire implementation of a new statewide managed care scheme to outsource the lion’s share of Oklahoma’s Medicaid program to insurance companies” without promulgating necessary agency rules to govern the program and without proper legislative authority.

OHCA is attempting to use two 1993 legislative acts that created OHCA and that authorized a system of “managed care” for Oklahoma’s Medicaid program to create a new managed care program in 2021. The first premise of the lawsuit is that OHCA has exceeded its authority because the 1993 legislation improperly delegated legislative authority to an executive agency. Further, even if the legislation was sound, OHCA’s actions don’t comply with the requirements of the 1993 law. Secondly, the lawsuit alleges that OHCA, in its haste, failed to first issue regulations that are required to implement the program. The regulations used to implement the failed 1993 managed care program were repealed earlier by the agency.

It seems that our fundamental belief in constitutional “check and balances” among the branches of government is being tested more and more these days. Gov. Stitt has an 82-19 majority in the House and a 39-9 majority in the State Senate from his own party. But rather than taking his managed care proposal to the Legislature where public policy is properly formulated, he has pushed it through with the OHCA board that he controls. Now the issue will be settled in court. Even if he wins in court, it seems like a bad bet to implement a health care plan into which those providing the health care have had no input.