- Oklahoma has picked four health insurers to manage its Medicaid program for about $2 billion, partially privatizing the safety-net insurance during the ongoing COVID-19 pandemic.
- The four private payers — UnitedHealthcare, Blue Cross Blue Shield of Oklahoma, Humana Healthy Horizons and Oklahoma Complete Health, a subsidiary of Centene — will manage Medicaid benefits for the state beginning Oct. 1, including the portions under its recently approved Medicaid expansion.
- Oklahoma maintains the switch will improve costs while maintaining access, but the move to cede Medicaid control to for-profit entities is highly controversial among state legislators and medical groups. The Oklahoma State Medical Association said Saturday it plans to file a motion opposing the change.
Medicaid has long been a thorny issue for the state, which has toyed with numerous methods to overhaul the program, called SoonerCare. Cutting ballooning program costs has been a key priority for Republican Gov. Kevin Stitt, though critics argue if the middle of a pandemic and economic recession is the most ideal time to revamp the safety-net insurance scheme, which covers about 940,000 Oklahomans.
Currently, the Oklahoma Health Care Authority manages Medicaid and reimburses providers directly under a fee-for-service model. But under the new model, called SoonerSelect, the state will pay the four private payers a lump sum per enrollee to coordinate care, and the payers can elect how they spend the funding.
Each of the selected companies, first announced Jan. 29, already has a presence in the state and were picked after a lengthy and competitive bid process, the Health Care Authority said.
According to StateImpact Oklahoma, the managed care contracts are worth $2.1 billion — one of the largest contracts procured in the state's history. The contracts are valid for one year through June 2021, with five optional one-year extensions at the state's discretion.
Up to three-quarters of the state's Medicaid enrollees will work with the payers, including the estimated 200,000 adults newly eligible for the program after Oklahoma's voters approved expansion last year, StateImpact reported.
With the new managed care model, Oklahoma joins 40 other states that contract with private insurers to manage a portion of their Medicaid program, though many states only do so for a small subset of the covered population. And not all managed care programs include a hard cap on how much money the state pays the insurer to manage care, as such models — known as fully capitated — don't leave a lot of room for error or unforeseen health events, such as a pandemic or natural disaster.
SoonerSelect is fully capitated. Proponents of the policy argue it insulates the state against growing financial risk in case the demand on Medicaid increases, while incentivizing preventative care in the program.
However, it's been a source of significant controversy for the state, with critics arguing SoonerSelect could hamper access for low-income Oklahomans while lowering provider participation in Medicaid. Medical groups and some lawmakers have also criticized the plan for sloppy design and having little-to-no legislative oversight or approval.
Additionally, the state's track record for implementing Medicaid managed care isn't ideal.
Oklahoma previously attempted to enact a managed care program in the late 1990s, but it was canceled in 2003 after crashing into myriad issues. Notably, the state's private payer partners asking for rate increases and began fleeing the program in droves when denied.
State legislators on both sides of the aisle have spoken out against SoonerSelect, along with medical associations like Oklahoma Osteopathic Association, Oklahoma Dental Association and the state's chapter of the American Academy of Pediatrics.
And the Oklahoma State Medical Association plans to seek an injunction against the program, citing concerns about legislative process, protecting rural patients and safeguarding taxpayer dollars.
"While we certainly have strong feelings about outsourcing the state Medicaid program to for-profit companies, this is about process," Pete Aran, OSMA board of trustees chair, said in a statement Saturday. "The fact remains that Oklahoma's legislature has not passed the appropriate legislation or funding to move managed care forward. We believe it is premature to move ahead with these contracts until the legislative process is completed."
Oklahoma has some of the worst health outcomes in the nation, ranking 46th out of all states for outcomes.
In a bid to improve coverage, state voters narrowly approved Medicaid expansion in June, opening up the program to households with incomes at or below 138% of the federal poverty level. The expansion, which goes into effect July 1, will cost Oklahoma an estimated $160 million, about a 10th of the total cost of expansion, with the rest paid out by the federal government.
Stitt, a vocal opponent of standalone expansion, last year requested CMS permission to cap funding in Oklahoma's Medicaid program for its expansion population, but his agencies pulled the request in August.