March 12, 2014

Proposal Would Overhaul Medicaid

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CAPITOL WATCH
March 12, 2014: Proposal Would Overhaul Medicaid

State Capitol - Jan 2014 - 2
March 13, 2014, Update: Senate Bill 1495 was amended Wednesday so that, rather than create a statewide privately-run managed care model by 2017, it would instead direct the Oklahoma Health Care Authority to create a pilot program for a privately-run managed care system by Jan. 1, 2016. The amended bill passed the Senate on Thursday morning by a vote of 25-21.  – Clifton Adcock

A bill that would make substantial changes to the state’s Medicaid program will likely be brought to the floor of the state Senate for a vote, the bill’s author said.

Senate Bill 1495, the “Oklahoma Medicaid Reform Act of 2014,” by Sen. Kim David, R-Porter, would turn the state’s SoonerCare program into a privatized “managed care” model.

Medicaid is a federal- and state-funded program that provides health care to low-income adults and children, including the disabled. The program is managed at the state level. The program is managed by the Oklahoma Health Care Authority.

David’s bill would require the authority to develop a statewide plan for all individuals covered by the Medicaid system; the program would shift to managed care by 2017.

All SoonerCare enrollees would have to enroll through a private managed-care organization. Another bill, HB 2788, by Rep. Mark McCullough, R-Sapulpa, contains similar provisions.

Such a change would require a federal waiver. However, Florida enacted a similar  change to its Medicaid program in 2011, and a federal waiver allowing those changes was granted in 2013.

Medicaid managed-care plans often are operated by private companies that contract with the state, which provides the organization with a set amount of money per enrollee each month. The amount varies depending on each person’s age, health and other factors. The company then pays providers, such as doctors, hospitals and nursing homes, for the care. If the bills exceed the amount provided by the state, the private company must eat the cost; if the bills are less, the company keeps the excess unless its contract caps the margin, in which case the net amount is returned to the state.

During the 1990s and early 2000s, Oklahoma’s Medicaid plan was administered through a partial managed-care system using health maintenance organizations, or HMOs. Medicaid enrollees in the Tulsa, Oklahoma and Lawton areas were required to go through an HMO to access care, while the state administered the program in rural areas because a lack of primary care providers there, said Carter Kimble, government relations director for the Oklahoma Health Care Authority.

However, around 2003, the state suffered a funding shortfall even as managed-care groups were seeking an 18 percent increase in state funding, Kimble said. The state was unable to meet that amount, and an Oklahoma City area managed-care organization quit the program. That brought the system below the federally requirement of having  three managed-care organizations, he said.

At that point, the Oklahoma Health Care Authority expanded its management of the program to all areas of the state; the program evolved into its current community-based managed-care model, Kimble said.

If the current legislation were signed into law, the Health Care Authority would transition from managing the program to overseeing the contracts between the state and the managed care groups.

David said the bill would improve health outcomes, lower costs and increase access to health care. She will likely bring it to the Senate floor for a vote on Wednesday. The deadline for bills to be voted on in their chamber of origin is Thursday.

“We have some of the lowest health outcomes in the nation, and yet we pay some of the highest provider rates,” David said. “We don’t do a good job of managing the care of this population.”

David said the health care environment has changed and would likely prevent a reoccurrence of the problems with the managed care system during the 1990s, and other states that have gone the statewide managed care route have provided a blueprint for the way forward.

Kimble said the Health Care Authority is neutral on the bill. Kimble said SoonerCare enrollees would not likely see dramatic shifts in their health care plans if the bill is passed; the increasing number of managed care organizations and reforms in the Affordable Care Act have helped resolve issues with patient coverage by the groups.

Kimble also said doctor shortages in rural areas are one of the reasons why SoonerCare has provider reimbursement rates that are higher than national average; the higher rates create an incentive for providers to accept SoonerCare patients.

Although David said the legislation has received support from advocates for patients,  doctors and hospital groups are not as supportive.

Charles Clark, president of Oklahoma’s State Council on Aging, criticized the plan in a March 2 opinion piece in the Tulsa World.

In an opinion article in the Journal Record, David Blatt, president of the Tulsa-based  Oklahoma Policy Institute, warned the plan could lead to the same problems the state faced in the late 1990s after it experimented with a managed care-type system for Medicaid.

The plan received support from the Oklahoma City-based think tank, the Oklahoma Council of Public Affairs. , which hosted a seminar for legislators last May highlighting the managed-care model in Florida and other states.

To read Senate Bill 1495, follow the link, click on the “Versions” tab and select Floor (Senate). http://www.oklegislature.gov/BillInfo.aspx?Bill=SB1495

-Clifton Adcock

March 10, 2014: Legislative Deadline This Week

This week is the final week that bills can be heard in their chamber of origin in the Legislature.

That means that if a House member introduced a bill, and it got past committee, it has until Thursday to be voted on by the full House. It’s the same situation in the Senate.

Bills that get passed by the end of the day Thursday will go to the other chamber to be considered by that chamber’s various committees.

Here’s a link to this legislative session’s deadlines: http://www.okhouse.gov/Legislation/LegislativeDeadlines.aspx

– Clifton Adcock
Clifton Adcock can be reached at cadcock@Oklahomawatch.org