Managed care will be bad for patients and providers

This is the second of three analysis pieces about the plan to introduce managed care organizations (MCOs) to oversee Oklahoma’s Medicaid program. Part one focused on managed care being a bad investment for Oklahoma.  

Raise Your Voice 

To speak out on the managed care proposal:

• Contact your legislators, who have the power to stop policy changes that negatively impact Oklahomans. Use OK Policy’s Find Your Legislator tool to contact your elected officials.

• Oklahoma Health Care Authority board meetings allow public comment, and interested Oklahomans should use these meetings to express opinions on this substantial change.  

The Oklahoma Health Care Authority (OHCA) is currently accepting proposals from corporations, in an effort to privatize Medicaid and outsource the services that OHCA has successfully provided for decades. Managed care has already failed in Oklahoma, with no evidence to suggest the market has changed since the last attempt. This transition would not only be a significant financial risk for the state, but would likely harm both patients and providers.  

Managed care likely won’t improve health outcomes for Oklahomans

There are no definitive conclusions on the actual impact of managed care on health outcomes. In fact, several populations could face potentially severe negative outcomes. The central crux of a managed care model is cost-saving, meaning that MCOs only profit by spending less on actual health care than the amount of their monthly payments from the state. With low capitation payment rates, there is significant incentive to restrict services or place limits on benefits, and some of these lost services may be specialized necessities that have long been available through SoonerCare. 

Similarly, rural Oklahomans may face disruptions in care under a managed care model. Geographic location can impact coverage options, and experts predict that managed care will lead to fewer participating physicians, especially in rural areas. This could put hours of driving between some rural residents and their doctors. Those with hourly jobs or without the luxury of paid time off may have to choose between seeking care and maintaining their paycheck. 

American Indians make up 10 percent of the SoonerCare population, and at a recent interim study, representatives from the Choctaw and Chickasaw Nations spoke about potential negative outcomes. Most tribes already provide care coordination, so managed care would be a duplication of services. The representatives also warned that MCOs lack cultural competency, something that is vital to providing quality care. Many American Indian patients report having lifelong, strong relationships with their providers. 

Neighboring states have had significant issues with quality of care since implementing managed care, as well. Texas has seen inadequate treatment, a broken medical appeals system, and wild variations in MCO standards. In Kansas, the federal agency that oversees Medicaid threatened to end the managed care program in 2017 after interviewing patients and providers. Oklahomans deserve quality health care, and in-house OHCA care coordination places the state in the best position to provide that.

Managed care will hurt providers

Health care experts, the providers themselves, have spoken out against managed care. In public comments, providers and advocates have cited fears of slow reimbursement, low rates, and excessive red tape. OHCA currently pays claims faster than private insurers, and many providers rely on the consistency of monthly Medicaid payments to keep the lights on. 

One way for MCOs to turn a profit is to cut provider rates, which could lead to low provider participation. Lower rates would force providers to either accept inadequate reimbursement or stop accepting SoonerCare, both of which could cause the provider to shut down, and, particularly in rural areas, could lead to significant job loss and a decrease in economic activity. This would especially harm providers that serve a large Medicaid population, and make it much harder for rural Oklahomans to access care. Without mandates that claims be paid in full within a certain time frame, providers could face significant financial issues. 

Pharmacists would likely also be negatively impacted by this change. At the most recent OHCA Medical Advisory Committee board meeting, a committee made up of providers, several board members expressed concerns about the impact of switching to managed care. One member pointed out that other states are looking to emulate Oklahoma’s current Medicaid administration system, and that many are moving pharmacy benefits in-house after West Virginia saved $54.4 million in one year by making that change. 

Provider advocates worry that a switch to managed care could lead Oklahoma down a path similar to those in other states: improper payment denials or delays and complex claim processes. After many providers advocated for Medicaid expansion and accessible care, It is unacceptable to implement it in a way that will inevitably cause harm. 

Oklahomans deserve better 

Managed care has never worked in Oklahoma, and the risks of another unproven experiment could be extremely detrimental to the state. Medicaid enrollees need access to care that is free from disruption and culturally competent, and providers need to be paid in full in a timely manner. 

Furthermore, OHCA is operating on an unrealistic timeline. The agency released a Request for Proposals from MCOs in mid-October, and plans to award contracts to MCOs in early 2021 and begin using managed care in October 2021. This time period warrants significant concern, especially because other states have faced substantial problems as a result of hasty moves to managed care. Simultaneous to this process, OHCA is currently undergoing a complete restructuring and plans to serve only in a contract oversight capacity moving forward, according to statements from OHCA’s CEO during the most recent board meeting. A state agency is being dismantled, and taxpayer dollars and the health of low-income Oklahomans will be negatively impacted if this decision is allowed to move forward. 

There is still time for Oklahomans to stop this reckless shift. OHCA board meetings allow public comment, and interested Oklahomans should use these meetings to express opinions on this substantial change. The Legislature also has the power to stop this change. In 2017, the House overwhelmingly passed a concurrent resolution directing OHCA to hit the brakes on its managed care efforts with more than half of the Senate in support. In 2019, Senate Bill 498 and House Bill 3479 would have prohibited OHCA from moving to managed care without the consent of the Legislature, but unfortunately both bills died in committee. Legislators must join together and proactively pass legislation requiring legislative consent before implementation of managed care, a taxpayer-funded experiment. Managed care may work in some places. Oklahoma has already proven that it doesn’t work here. 

ABOUT THE AUTHOR

Emma Morris serves as the Health Care Policy Fellow at OK Policy. She graduated from the University of Oklahoma in fall 2019 with dual degrees in Women’s and Gender Studies, and Public and Nonprofit Administration. She is an alumnus of OK Policy’s Oklahoma Summer Policy Institute.

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