Managed care discussions likely to continue this session (Capitol Update)

Chapter two of last year’s Medicaid managed care saga is underway. It appears from the introduction of Senate Bill 1337 and comments by Senate Majority Leader Greg McCortney, R-Ada, that discussions about changing Oklahoma’s delivery system for Medicaid services from a “fee-for-service” to a “managed care” or “value-based” model have continued since the legislature adjourned last May. In addition, Oklahoma Health Care Authority (OHCA) CEO Kevin Corbett told the Senate Appropriations Subcommittee that OHCA is still strongly motivated to move away from the fee-for-service model.   

Last session, legislators concluded that Gov. Stitt’s actions before the legislature had an opportunity to act were a fait accompli preventing them from stopping implementation of the managed care contracts executed by the Oklahoma Health Care Authority and four large insurance companies. In response, they passed SB 131, commonly referred to as the “guardrail” bill to set out certain protections for providers and recipients of healthcare services. The Oklahoma Supreme Court later ruled the contracts were void because OHCA lacked legislative authority to contract for managed care. That left the guardrails in effect without the managed care. 

In this year’s SB 1337, Sen. McCortney is simply repealing language in the old Medicaid law that OHCA mistakenly relied on last year to contract for the new managed care program. The out-of-date language serves no purpose on the books, and the bill could serve later as a vehicle for a new legislative managed care authorization, if ongoing discussions result in agreement. 

Both Sen. McCortney, who assumed the lead in the Senate on the managed care issue, and Rep. Marcus McEntire, R-Duncan, who takes the lead in the House, have said they are not unalterably opposed to a value-based model for providing Medicaid services. What they’ve both made clear is they are strongly opposed to management contracts with out-of-state insurance companies, and the membership of both chambers appears to agree. 

Sen. McCortney has said any agreement will need to ensure providers “especially those that live and care for the people of Oklahoma” are “the people in charge of the system” as opposed to out-of-state, third-party interests. No one knows at this point if such an agreement is possible or what it would look like. It could involve local managed care organizations, accountable care organizations organized and run by providers, simply a shift to a value-based pay structure managed by OHCA, or perhaps something else. Or the state could remain on a fee-for-service model. This could be one of those things that is resolved in the waning days of the session — or not at all.


Steve Lewis served as Speaker of the Oklahoma House of Representatives from 1989-1990. He currently practices law in Tulsa and represents clients at the Capitol.

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