The Oklahoma Health Care Authority announced Tuesday its plans to cut reimbursement rates for Medicaid providers by 25 percent as a result of the state’s budget shortfall for the upcoming fiscal year.
The cuts, which must first go through a series of public hearings over the next 60 days, would affect all provider types, including hospitals, physicians, pharmacies, durable medical equipment suppliers and nursing facilities, according to a news release from the Health Care Authority.
The proposed 25 percent cut would bring the reimbursement rate in the state’s Medicaid program, SoonerCare, down to 64.9 percent of the Medicare reimbursement rate for the 46,129 providers the Health Care Authority contracts with around the state.
If there are further cuts, it’s possible that the rates could be cut even more, the Health Care authority states.
In 2012, Gov. Mary Fallin rejected as much as $3.6 billion in federal funding to expand the state’s Medicaid program over seven years, reflecting Republicans’ fight against the Affordable Care Act. The expansion was projected to cover as many as 200,000 uninsured adults.
Over the past two years, the Health Care Authority has lost more than $868 million in state and federal funds because of budget cuts, with a total of $1 billion in reductions over the last decade, the release stated.
Facing mid-year budget cuts, and a projected $1.3 billion budget shortfall in fiscal year 2017, the Health Care Authority has already approved previous rate cuts to providers.
The agency also proposes to eliminate payments for coinsurance and deductibles on crossover claims, limiting all new professional service contracts, and has implemented a hiring freeze.
“I do not take these cuts lightly,” said Nico Gomez, Health Care Authority CEO. “I worry about the infrastructure of our health care system in light of these cuts. From a business standpoint, I’m afraid many providers will close their doors to our patients. In some cases, especially in rural parts of our state, health care professionals will have to move their business to larger communities in order to survive financially.”
If the cuts are finalized, it would take around 90 days for the changes to impact the budget, the Health Care Authority estimates.
A bill by Rep. Doug Cox, R-Grove, also would have tightened eligibility requirements for Medicaid and likely caused more than 100,000 to lose eligibility. The bill passed the House but was defeated in a Senate committee.