Some people in the health care industry are relieved that privatization of an Oklahoma Medicaid program has ground to a halt for lack of funds.
The Oklahoma Health Care Authority canceled the bidding process for companies vying to manage services for the aged, blind and disabled population. The authority oversees SoonerCare, which is Oklahoma’s Medicaid system that also provides health coverage for children and low-income people.
Under managed care coordination, one or more for-profit companies cover doctor’s visits, prescriptions, long-term care or any other eligible cost while receiving payments from the state. The fixed payments provide an incentive to cover only the most effective treatments and encourage patients to live healthier lives.
Brett Coble, board president for the Oklahoma Association of Health Care Providers, said he hoped the authority would nix the idea.
“One of the chief reasons was the up-front cost to the state that we simply can’t afford in the financial state we’re in,” said Coble.
Estimates showed the state would have to pay more than $100 million extra in startup costs during the first couple of years as the service transferred to private management.
Coble also said new federal regulations threatened funding for other programs if Oklahoma switched to a managed Medicaid system. Those regulations were introduced after Oklahoma lawmakers ordered a request for managed care proposals in 2015.
“Those things put a substantial amount of federal dollars that not only nursing homes rely upon, but also a lot of our hospitals and funding that teaching hospitals use — it puts all that at risk,” said Coble, whose association represents nursing homes.
Becky Pasternik-Ikard, CEO of the Health Care Authority, said the decision was made in the best interests of the state because there was uncertainty in both state and federal funding.
“In addition to the funds needed to maintain services at current levels, the agency requested approximately $52 million to fund the care coordination model,” Pasternik-Ikard said. “The additional request was not funded; therefore, the agency is unable to move forward with the (request for proposals).”
The process cannot be restarted, and an agency spokeswoman said it’s unclear whether the Legislature would have to pass another bill authorizing it.
Delaying implementation drew support this year from most lawmakers and even Gov. Mary Fallin, who asked the authority to wait a year. A resolution introduced at the state Capitol last month would have directed the authority to pause the process indefinitely, but it wasn’t given a hearing in the Senate.
The Senate’s Appropriations chair, Kim David, said Thursday she disagreed with the authority’s reasons for canceling implementation.
“This statewide model would have saved money for Oklahoma with a program that would better serve these individuals, providing a greater continuity of care and services that would have kept them out of the hospital and in their own homes. Any uncertainty of funding would make adopting this model all the more important,” said David, R-Porter.
David also questioned the claim that, in the first year alone, it would cost the state $52 million to fund it.
“These are individuals we’re already caring for, and in talking to other states, they encountered no such need for additional funding when they moved to this system,” she said.
But another senator, Rob Standridge, said data from other states shows that privately managed Medicaid is a financial drain when companies come back saying they aren’t being paid enough to run the programs.
“I didn’t see anything in the three-year analysis where we would experience any significant savings, and I think some of the states around us made us nervous whether we could ever experience savings,” said Standridge, R-Norman.