Time to hit the brakes on SoonerCare privatization

Oklahoma’s efforts to privatize expensive care for the most fragile SoonerCare patients was contentious from the beginning. In 2015, HB 1566 directed the Oklahoma Health Care Authority, which administers the state’s Medicaid (SoonerCare) program, to initiate requests for proposals for care coordination models for the program’s aged, blind, and disabled members.

This would be no small change. More than 100,000 SoonerCare members are aged, blind, or have one more disabilities, and while they make up less than 20 percent of Oklahoma’s Medicaid population, their care constitutes nearly half of its spending. These individuals tend to be very medically complex, with co-occurring chronic conditions and in-home care needs. As such, they are very sensitive to changes in their health care.

Lawmakers pushing for the transition were very clear that it was a cost-saving effort, leaving members and advocates concerned that their health needs would be overruled by budgetary concerns. These concerns increased when the Health Care Authority settled on an inflexible “fully capitated” care model, where 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 on their plans.

Nevertheless, the transition to privatized care for aged, blind and disabled SoonerCare members continued with the request for proposals released in November of 2016. Original timelines suggested a contract would be awarded in spring of this year. It’s since been pushed back to June at the earliest due to an administrative hiccup, but now a new development may push that time frame back even further.

This spring, providers warned that a recent federal change in federal Medicaid rules could mean that transitioning to privatized managed care would jeopardize hundreds of millions of dollars in Medicaid payments to Oklahoma providers. Federal rules published last year and clarified this winter require states transitioning to managed care to cease making supplemental payments to providers. These supplemental payments have provided additional funding to providers serving a high volume of Medicaid patients. According to the Oklahoma Hospital Association, the Oklahoma Association of Health Care Providers, and others, Oklahoma safety net providers could be out as much as $650 million. Further additional supplemental payments through the state’s SHOPP program to Oklahoma hospitals may also be at risk.

For lawmakers already wary of dramatically reconfiguring health care delivery for some of the state’s most medically complex, and hearing as much from nervous members in their districts, this may be the last straw. House Concurrent Resolution 1009 was introduced earlier this month and quickly picked up more than 50 coauthors before easily passing the House 83-4. The measure directs the Health Care Authority to refrain from awarding a managed care contract without legislative approval – which can’t happen until next year. More than half the Senate has signed on as co-authors, more or less assuring its passage if it’s heard.

Freezing the transition to privatized care for Oklahomans with complex medical needs is a good first step. Last year we explained our concerns with looking for cost savings from those with the greatest medical need. Since then, uncertainty about the future shape of Medicaid has only grown. The state’s budgetary agonies aside, proposed federal transmogrifications threaten to devastate funding and end Medicaid as we know it. Massive uncertainty on the federal level make this precisely the wrong time to be further monkeying with a system that more than 100,000 Oklahomans need to survive.

Speaking to Oklahoma Watch when the privatization process kicked off, OHCA Chief Strategy Officer Buffy Heater said, “There is no room for failure. We have to get this right, because their lives really hang in the balance.”

She’s right – but now, too many variables are outside the Health Care Authority’s control to guarantee members’ safety. For this reason, putting the brakes on this health care transition is the right thing to do.

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Carly Putnam joined OK Policy in 2013. As Policy Director, she supervises policy research and strategy. She previously worked as an OK Policy intern, and she was OK Policy's health care policy analyst through July 2020. She graduated from the University of Tulsa in 2013. As a student, she was a participant in the National Education for Women (N.E.W.) Leadership Institute and interned with Planned Parenthood. Carly is a graduate of the Oklahoma Center for Nonprofits Nonprofit Management Certification; the Oklahoma Developmental Disabilities Council’s Partners in Policymaking; The Mine, a social entrepreneurship fellowship in Tulsa; and Leadership Tulsa Class 62. She currently serves on the boards of Restore Hope Ministries and The Arc of Oklahoma. In her free time, she enjoys reading, cooking, and doing battle with her hundred year-old house.

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