SB 1337 would provide managed care provisions for state Medicaid (Capitol Update)

Note: Capitol Update is a guest column from former Oklahoma House Speaker Steve Lewis’ weekly newsletter focused on major events occurring in the state capitol.

Senate Bill 1337 by Sen. Greg McCortney, R-Ada, and Rep. Marcus McEntire, R-Duncan, was introduced as a so-called “placeholder” bill that would move through the process meeting legislative deadlines while legislators work behind the scenes to determine if a managed care proposal can be agreed upon and passed this session. The bill took its first major step into public view when a “floor substitute” was filed last Monday afternoon. 

The floor substitute replaced the eight-page introduced placeholder with a 44-page detailed version of a Medicaid managed care program to be authorized by the legislature and requiring at least three “capitated” contracts to be awarded for statewide Medicaid services. Simply put, capitated means the contractor gets paid a certain amount for each enrolled Medicaid member and is then obligated to provide all necessary medical services. Whether the contractor makes money depends on how much it must spend on each member. 

SB 1337, as it stands now, is the legislative authority for Medicaid managed care the Oklahoma Supreme Court ruled was lacking last year when the Oklahoma Health Care Authority (OHCA) signed four managed care contracts with commercial insurance companies just prior to the beginning of the session. The bill is obviously the product of a lot of work by the OHCA since the Supreme Court ruling last year. 

The new bill has some features that, as I recall, were not in the OHCA contracts last year and are aimed at resolving some of the concerns expressed by legislators. For example, the bill provides that at least one of the contracts to provide health care services must be awarded to a “provider-led entity,” if a provider-led entity submits a reply to OHCA’s request for proposals and demonstrates ability to fulfill the contract requirements. A provider-led entity is one owned and controlled by licensed providers in Oklahoma. The bill also contains a number, but not all of the so-called “guardrail” provisions in SB 131 from last session. 

I’ve heard two versions of whether managed care is going to pass this session. Some think it is very likely while others doubt it. The bill passed the Senate floor last week 38-6 with the title stricken, which means the Senate will have to vote on it again. As he presented the bill on the Senate floor, it seems clear Sen. McCortney is not yet comfortable with all its provisions. I don’t know how much input he or other legislators had in the current language. There’s also the issue of Medicaid rates and funding to be determined. For sure, any health care provider who depends on payment from Medicaid should keep a close eye on this bill. Unfortunately, the process is not always very transparent. 


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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