Managed care will have a disproportionate impact on Indigenous communities

About this Series

This is the third 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, and part two focused on managed care being bad for patients and providers. 

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Medicaid expansion, if done correctly, will bring incredible returns to Oklahoma. A fully-funded, comprehensive Medicaid expansion would create up to 26,000 jobs and generate $2.3 billion in new economic activity in the state. Unfortunately, Gov. Stitt and the Oklahoma Health Care Authority (OHCA) are taking risks that could compromise those benefits by changing the entire Medicaid administrative structure in just one year. Managed care has historically failed in Oklahoma, and if it fails again, it will hurt patients, providers, and taxpayers. 

This negative impact will likely be even worse for Oklahoma’s Indigenous communities, who make up roughly 10 percent of both the current and expansion SoonerCare population, according to an analysis from the health care advocacy group Families USA. Tribal health care doesn’t have the problems that managed care organizations (MCOs) claim to fix, and tribal advocates worry that managed care would be harmful for American Indians and Alaska Natives (AI/AN) due to a lack of cultural competency among MCOs and potentially inadequate provider networks. 

Enrolling this population in managed care will likely also exacerbate the state’s budget crisis due to the potential loss of millions in federal funds. To avoid this loss, Oklahoma should continue administering Medicaid through the historically effective and efficient OHCA. This is the fiscally responsible choice that will ensure tribal citizens and all Oklahomans have access to the highest quality care. 

The government should live up to its responsibility to American Indians

The federal government has an obligation through the federal trust responsibility to “protect tribal treaty rights, lands, assets, and resources,” and this responsibility includes providing health care through the Indian Health Service (IHS) system. Unfortunately, the federal government has a long history of failing to uphold its responsibility to the Native population, as well as chronically underfunding IHS. Additionally, people with coverage only through IHS are considered uninsured because IHS is underfunded and not widely available. Access to Medicaid is vitally important, because it provides much more comprehensive access to services and providers than IHS. 

Medicaid plays an important role in the lives of many Native individuals across the country, but it is especially important in Oklahoma. More than 14 percent of Oklahomans identify as part of the Native population, which is the second-highest percentage nationwide. Oklahoma has a responsibility to provide the highest quality care for our Indigenous residents. Unfortunately, state and federal historical failures have led to harrowingly disparate health outcomes: 

• In 2017, 1 in 4 American Indians in Oklahomans were uninsured 
• Native children consistently have the highest rates of uninsurance 
• The Native population has higher rates of mental and physical health problems, suicide, and chronic diseases 
• Native individuals are more likely to die from preventable diseases
• These disparities have only been exacerbated by COVID-19

Needless to say, Oklahoma must move forward in a way that elevates and addresses the needs of the state’s American Indian residents. Oklahoma’s current Medicaid model can be updated to better serve its Indigenous population, but managed care isn’t one of those solutions. 

Access to care may be impacted by privatization 

The Request for Proposals (RFP) for managed care released by the OHCA specifies that the Native population will have the option of enrolling in managed care, a move that was recommended by tribal advocates at a recent interim study. While the opt-in provision will give Native individuals more choice in the matter, certain concerns remain. First, Indian Health Care Providers (IHCPs) already provide care coordination, so creating an option for managed care through MCOs will be a duplication of services and likely confusing for patients. Additionally, tribes have expressed concern around a lack of cultural competence among companies with little previous experience working with Indigenous communities. Actions such as involving patients in medical decisions, recognizing cultural differences, and understanding how culture impacts health are all important in ensuring adequate care for a population with an understandable distrust in the government.  

Inadequate provider networks and pre-authorization requirements may also pose threats to accessible care. Many American Indians treated by IHCPs have long-standing relationships with their primary care providers. Inadequate networks could cause disruptions in primary care relationships, as well as an inability to seek necessary speciality care outside of the network. Similarly, pre-authorization requirements could keep Native providers from providing a service not covered by the MCO. Because of potential financial incentives to restrict care, specialized care may be less accessible than it has been in the past.  

Privatization could cause a negative fiscal impact and an increase in bureaucratic processes

Managed care could pose a significant fiscal risk to Oklahoma. The federal government reimburses states for a portion of their Medicaid costs through the Federal Medical Assistance Percentage (FMAP). Health care provided to the Native population through Indian Health Care Providers is eligible for a federal reimbursement rate of 100 percent. However, states can only claim this 100 percent federal match when services are provided by an IHCP or by a provider with a formal care coordination with an IHCP. Introducing managed care and accompanying non-IHCP networks increases the likelihood that a state will lose federal funds. For example, Arizona’s managed care model (which is similar to Oklahoma’s intended model), saw more than twice as high of a rate of not maximizing the 100 percent match than its fee-for-service program. If Oklahoma had a result similar to Arizona’s, it could cost the state an additional $52 million annually, according to an analysis from Families USA. This would be in addition to the general cost increase the state could face by moving to managed care. 

Managed care will also lead to an increased administrative burden for providers. Whether IHCPs bill OHCA or an MCO will be dependent on the enrollment status of the patient, and the state and providers will need to have processes in place to accurately track claims of services that are eligible for the 100 percent reimbursement. This will place additional burdens on providers. Additionally, tribes in some other states have been denied payment by MCOs, placing already underfunded facilities, frequently in rural or underserved areas, at greater financial risk.

It doesn’t have to be this way 

American Indians and Alaska Natives represent a significant portion of our state’s population and deserve culturally competent, accessible health care. Tribal providers should be fully compensated, and the state doesn’t have an additional $52 million to spend on an avoidable problem.

The United States has historically and systematically failed to keep its promise to American Indians. If Oklahoma moves forward with this change, and tribal experts’ predictions of care disruptions and unpaid providers prove true, Oklahoma will be continuing the tradition of failing sovereign tribal nations and its citizens. Continued in-house implementation of Oklahoma’s Medicaid program won’t solve the problems that state and federal governments have created for Indigenous communities, but it will ensure that the problems are not made worse. 

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For more information on America Indian and Alaska Native health care, visit the National Council for Urban Indian Health and the National Indian Health Board.