As directed by a law created last year, the Oklahoma Health Care Authority (OHCA) spent much of the fall exploring options to move the roughly 180,000 SoonerCare patients who are aged, blind, or have one or more disabilities (ABD) into privatized, managed care. In November, OHCA reported that they would develop a request for proposals from private companies to offer this care statewide under a “fully capitated” model. That means private health insurance companies contracted by the state would receive a set per-member, per-month payment and would be responsible for providing the full range of health care services to those who sign up or are assigned to their plan.
Some long-standing providers of services to frail seniors and those with disabilities might be left out of the new managed care networks. Many organizations serving or representing Oklahomans who are aged, blind, or have a disability, as well as their family, friends, and caretakers, have been up in arms over the proposed changes. Their concerns have merit. In states that have turned care management for similar populations over to private organizations, the process has been rocky at best.
A central issue across states when transitioning Medicaid patients with complex medical needs to managed care organizations is large disruptions in the care those members receive. Here’s a non-comprehensive list of what’s happened in other states:
- In Kansas, Iowa, and Kentucky, some members with severe chronic illnesses and disability reported that their care and coverage were significantly cut when they were assessed by the private organizations, despite no change in their conditions.
- In Kentucky, an evaluation of the first year of privatized care by the Urban Institute reported, among other issues, “difficulty maintaining continuity of needed prescription medications for chronic conditions,” “claims denials resulting in higher levels of appeals,” and “behavioral health service gaps…reportedly exacerbated.” Providers reported significant payment disputes that left their offices unpaid for months, and Kentucky advocates reported that rural community mental health centers limited or cancelled plans because the managed care companies weren’t authorizing enough treatment to allow the providers to break even.
- Lengthy enrollment and renewal glitches have left an estimated 10,000 Kansans in limbo, including members with chronic diseases who can’t wait to access care until their membership is untangled but also can’t afford to pay thousands of dollars out of pocket. Kansas care providers have been left on the hook for unreimbursed costs, and hospitals with these “Medicaid-pending” patients who need to transfer to long-term care can’t locate facilities that will agree to take the patients because they don’t know how long it will take for the care to be reimbursed.
- Despite lawsuits, Florida families still encounter devastating gaps in pediatric coverage, leaving parents struggling to locate providers for even very ill children.
States have privatized their Medicaid programs in hopes of incentivizing savings, but it’s hard to find clear evidence of that savings. In 2012, the Robert Wood Johnson Foundation reviewed state savings, increased access to care, and improvements in care for Medicaid managed care; its results were inconclusive. That same year, the Kaiser Family Foundation reported:
While managed care may be able to generate savings over time by improving access to preventive and primary care and more effective management of chronic conditions, savings from improved utilization patterns are unlikely in the short-term, and budget-driven efforts to achieve savings from managed care could have adverse consequences for beneficiaries’ access to needed care.
It’s not clear what level of savings could be generated in Oklahoma. In the 22 responses to OHCA’s request for information in 2015, savings projections varied widely, although most respondents assumed some reduction in health care utilization. Another concern is that Oklahoma tried privatized Medicaid before but terminated the program when costs went through the roof. Today, Oklahoma’s Medicaid payments per enrollee are well below all but one state with a high percentage of Medicaid patients in managed care.
It’s also unusual for states to try to generate savings out of the most medically-frail patients. In most states with Medicaid managed care, enrollment for aged and disabled populations underpaces that of the general population. When crafting expansions of their Medicaid programs, both Arkansas and Montana built in exceptions for medically frail patients, keeping them enrolled in traditional Medicaid rather than moving them into private coverage. Yet Oklahoma is moving in the opposite direction by creating a new Medicaid managed care system only for Oklahomans who are aged, blind, or disabled.
The bottom line
Although it’s possible that moving Oklahoma’s aged, blind, and disabled population into privatized care could generate some savings, evidence suggests that those savings would be realized slowly if at all. In the meantime, the transition would likely disrupt health care for Oklahomans with complex care needs and put health care providers at risk. Some legislators are taking these concerns seriously. Sen. Rob Standridge (R-Norman) has filed legislation designed to put the brakes on implementation of Medicaid managed care (SB 1500, SJR 56), while Rep. Johnny Tadlock (D-Idabel) has proposed delaying implementation for some groups (HB 2308). Hopefully lawmakers will take heed of the warnings and reconsider this risky experiment with the most vulnerable Oklahomans.