June 23, 2014

Oklahoma Health Authority Weighs $252 Million in Medicaid Cuts

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Note: A version posted earlier incorrectly stated that proposed Medicaid cutbacks would eliminate dental benefits for infants. Instead, dental benefits for pregnant women would be reduced.


The Oklahoma Health Care Authority will consider $252 million in Medicaid cutbacks at its board meeting on Thursday, including new limits on patient services, higher copays and smaller reimbursements to doctors and other medical providers.

The cutbacks, described in a draft agenda for the board’s 1 p.m. meeting (see below), were devised by leaders of the Health Care Authority and the Oklahoma Department of Mental Health and Substance Abuse Services in response to standstill state funding and reduced federal support.

The biggest cost-saver is a proposed 8 percent reduction in reimbursements to doctors and other providers who treat the 279,000 low-income adults and 524,000 children who participate in the state’s Medicaid program, called SoonerCare.

The across-the-board reimbursement cut would total $150 million during the fiscal year that begins July 1. Because Medicaid costs are shared by the federal and state governments, net savings to the state would be $56 million.

Other, more targeted cuts would reduce provider reimbursements by a total of $9 million, with state savings of $3 million.

Higher patient copays would generate $8 million in savings, of which $3 million would accrue to the state.

A proposed reduction in mental health services would generate $54 million in savings by limiting outpatient rehabilitation provided to adults. The state share of the savings would be $20 million.

The remainder of the cuts would restrict eligibility for specific services. For example, reducing dental benefits for pregnant women would lower total outlays by $4 million and save the state $1.5 million. Restricting the number of eyeglasses provided to children would save $347,055, netting the state $129,347.

Health Care Authority spokeswoman Jo Kilgore said reductions are necessary to enable her agency to maintain existing programs with the funds available to it.

Kilgore said the agency would have needed about $104 million in additional state funding to offset a $50 million reduction in federal matching funds, $40 million in added expenses caused by a growing caseload and a $14 million reduction in earmarked tobacco-tax revenue.

The federal match is being cut because Oklahoma’s economy is doing better than those of other states. The formula-based reduction has nothing to do with Oklahoma’s rejection of the Obama administration’s proposed Medicaid expansion, Kilgore said.

The budget approved by the Legislature and signed into law by Gov. Mary Fallin last month provided the agency with essentially flat funding for 2015.

“It basically is what it is,” Kilgore said. “It’s our need versus what our appropriation was, and trying to balance those two.”

Oklahoma’s total Medicaid spending last year was $4 billion, of which $907 million was provided by the state.

 


Warren Vieth can be reached at wvieth@oklahomawatch.org


  • Joanna

    I think cutting mental health services from Sooner Care is a terrible idea. I work with emotionally disturbed students at the middle school level in a title one school. These kids heavily rely on those services to meet their needs. There is enough evidence in today’s world individuals who have been diagnosed with these disorders benefit from these services. These programs teach them the skills necessary to manage their behavior and actions. To take those services away from these individuals that need them the most, and cannot afford it otherwise is in poor judgement. If our goal as a society is to develop well rounded individuals that can positively impact the future we are robbing them of that opportunity. These mental health services were put in place to provide these individuals with the tools necessary to become productive members of society. We see it time and time again on the news, people with these disorders that are untreated making irrational choices and causing harm to innocent people. I understand funding is a problem but to take these services away could lead to some disastrous consequences.