Health Care

Kaitlyn Finley | May 4, 2021

Oklahoma House seeks to grow state health agency

Kaitlyn Finley

The Oklahoma House of Representatives recently passed Senate Bill 131, which would greatly increase the size and scope of the Oklahoma Health Care Authority. The bill is now set to be heard in the Oklahoma Senate.

Senate Bill 131, authored by Sen. Jessica Garvin (R-Rush Springs) and Rep. Marcus McEntire (R-Duncan), would direct the Oklahoma Health Care Authority to create a state-run “managed care” program for Medicaid members. This program would create new departments and hire additional personnel to provide care management for members, focusing on preventative care and chronic condition care management.

If enacted, Senate Bill 131 would interfere with Gov. Kevin Stitt’s efforts earlier this year to contract private companies to implement managed care. If the Oklahoma Senate passes SB 131, it is likely Gov. Stitt would veto the legislation.

Efforts to reform Oklahoma’s Medicaid program have been spurred this legislative session by the looming implementation of Medicaid expansion. Thanks to the previous passage of State Question 802, beginning July 1 Oklahoma’s Medicaid program will open eligibility to certain able-bodied adults. State officials have estimated Medicaid expansion may cost Oklahoma taxpayers anywhere from $164 million to $246 million annually.

In order to help offset the new costs of Medicaid expansion, Gov. Stitt has sought to contract with private companies to take over much of the administrative work associated with SoonerCare as well as implement a new care-coordination program.

In January, Gov. Stitt announced that the Oklahoma Health Care Authority had reached agreements with four companies to implement managed care for Oklahoma’s Medicaid program.

Under this delivery of care model, known as managed care, private managed care companies are in charge of coordinating care for beneficiaries. Managed care companies (MCOs) are also incentivized and held accountable by the state to help control costs and improve health outcomes for enrollees.

Generally, managed care companies receive a pre-capped amount to provide all preventive, wellness, and general medical care for beneficiaries; they assume much of the financial responsibility if costs exceed the capped amount.

Forty other states contract with private managed care organizations to care for their Medicaid enrollees.

House lawmakers, including Rep. McEntire, have publicly rejected Gov. Stitt’s plan to implement managed care.

Instead of contracting with private companies that specialize in care coordination and providing preventive care programs, SB 131 would direct the Oklahoma Health Care Authority to run its own managed care program.

The fiscal analysis of the bill prepared by the House’s legal staff stated, “Although SB 131 does not expressly prohibit third party managed care through SoonerSelect, in order to build a state-run managed care delivery system, the agency would require a significant investment that would continue for several years.”

Approximately $263 million would be needed annually to fund state-run managed care as directed by SB 131.

The analysis further states that “OHCA does not currently have the personnel, infrastructure, or technology needed to coordinate care at such a level to immediately provide SoonerCare members increased opportunities to access appropriate, quality care and improve poor health outcomes, while still controlling costs via a capitated per-member per-month cost” (emphasis in original).

The number of Oklahoma Medicaid enrollees has grown significantly relative to the general state population over the past two decades, leading to a sharp increase in expenditures.

With expansion coming down the pike, this would be the worst time to throw hundreds of millions of dollars towards the Oklahoma Health Care Authority to implement managed care. They do not have the time, infrastructure, or incentives to implement managed care effectively or efficiently.

Instead of further growing government and reinventing the managed-care wheel, the legislature should reject SB 131 and adopt Gov. Stitt’s plan to manage Medicaid costs.

Kaitlyn Finley Policy Research Fellow

Kaitlyn Finley

Policy Research Fellow

Kaitlyn Finley currently serves as a policy research fellow for OCPA with a focus on healthcare and welfare policy. Kaitlyn graduated from the University of Science and Arts of Oklahoma in 2018 with a Bachelor of Arts in Political Science. Previously, she served as a summer intern at OCPA and spent time in Washington D.C. interning for the Heritage Foundation and the U.S. Senate Committee on Environment and Public Works.

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