Managed Care is a health care delivery system organized to manage cost, utilization, and quality. Unlike a traditional fee-for-service system, in which a provider is paid directly by an insurer for every service delivered, under managed care, an insurance company, organization, or provider is responsible for providing a specified set of services for each insured member in return for a set monthly payment, known as the capitation rate.
A managed care organization is an entity that receives a capitated payment and coordinates a patient’s care through a defined network of physicians and hospitals. An HMO, or Health Maintenance Organization, is a variety of managed care organization that typically requires patients to seek care from doctors and other providers who work for or contract with the HMO. In exchange for being limited in their choice of providers, patients enrolled in an HMO typically have lower out-of-pocket costs than in a fee-for-service plan.
Oklahoma’s Medicaid program, known as SoonerCare, operates a limited form of managed care. Under the SoonerCare Choice program, most children and working-age adults select or are assigned to a Primary Care Provider/Care Manager (PCP/CM), who receives a monthly capitated payment for coordinating the care of each of their patients.
Oklahoma ran a fully capitated managed care HMO program in urban areas from 1996 to 2004. In 2020-21, Governor Kevin Stitt and the Oklahoma Health Care Authority (OHCA) looked to create a new capitated managed care program, known as Sooner Select, to cover pregnant women, children, and low-income adults, including the population newly eligible under Medicaid expansion, with an implementation date of October 2021. In June 2021, the Oklahoma Supreme Court struck down the Governor and Health Care Authority’s managed care proposal for having failed to receive legislative approval. Despite this major setback, the Governor and OHCA continued to move forward with managed care. In 2022, the Legislature passed SB 1337 that requires the state to issue a request for proposal and to award at least three Medicaid managed care contracts to health plans or provider-led entities like accountable care organizations to take effect by October 2023. Oklahoma will also issue separate RFPs for a Medicaid dental benefit manager plan and a Children’s Specialty plan.