FAQ: As Oklahoma Debates Managed Care, What Does it Really Mean?

Oklahoma is on the verge of overhauling its Medicaid program and changing how about a quarter of the state’s population receives health care. 

Gov. Kevin Stitt and the Oklahoma Health Care Authority announced in late January that the state will contract with four companies to provide managed care for hundreds of thousands of SoonerCare members. 

The decision has big implications for the state’s budget picture and the health of low-income adults and children who receive health insurance through the program. 

But with opposition mounting and lawmakers in session, the move to managed care is far from a done deal. As state officials and the medical community debate what to do next, here is a primer on some of the big questions surrounding the debate. 

What Exactly is Managed Care?

It is a type of insurance where the insurer partners with one or more health-care companies (managed care organizations) to coordinate – or manage – how and where patients receive the care. 

This, for example, could mean that the managed care organization outlines your provider network, determines what services are medically necessary and incentivizes early or preventive care. 

In Oklahoma’s case, the state Medicaid agency is contracting with private companies to administer a comprehensive set of benefits. This will be called SoonerSelect.

Currently, the state’s Medicaid program, also known as SoonerCare, predominantly uses a fee-for-service model where the state pays doctors or other providers directly, based on each service they provide. 

Moving to a managed care model would instead have the state pay the managed care organizations a set per-member-per-month (PMPM) cost. 

What Are the Possible Benefits?

Gov. Kevin Stitt and other supporters believe managed care will save the state money and avoid fluctuations in spending because providers will have more incentive to deliver the best value rather than billing based on the volume of patients or procedures. 

According to the federal Centers for Medicare and Medicaid Services, some states have used managed care to better “coordinate and integrate” care.

“By contracting with various types of (managed care organizations) to deliver Medicaid program health care services to their beneficiaries, states can reduce Medicaid program costs and better manage utilization of health services,” the center’s website states. “These initiatives are focused on improving care for populations with chronic and complex conditions, aligning payment incentives with performance goals, and building in accountability for high-quality care.”

What Do Opponents Say?

A broad coalition of Oklahoma’s medical groups and a mix of Republican and Democratic lawmakers have come out in opposition. They fear managed care will lead to reduced or delayed reimbursements to providers that could force some to stop accepting Medicaid patients. This is a particular concern in rural Oklahoma, where access to care is a serious issue. 

Another concern is that outsourcing the care to the private, for-profit health companies will lead to higher administrative costs than having the Oklahoma Health Care Authority carry out that task.

Who Would be in Charge of Managed Care?

The Oklahoma Health Care Authority in late January announced $2.2 billion worth of contracts with four managed care organizations — Blue Cross Blue Shield of Oklahoma, Oklahoma Complete Health, Humana Healthy Horizons and UnitedHealthcare. The contracts are through June 2022 with the state holding the option on five one-year extensions.

The state also recently announced that DentaQuest, LIBERTY Dental Plan of Oklahoma, Inc., and MCNA Dental were awarded contracts to execute the dental component.

Is Managed Care a Done Deal?

Not yet. There remain legal and legislative avenues for the state’s plan to be reversed or delayed. 

The Oklahoma State Medical Association, Oklahoma Dental Association, Oklahoma Osteopathic Association, Oklahoma Society of Anesthesiologists and the Oklahoma chapter of American Academy of Pediatrics filed a lawsuit earlier this month seeking an injunction to stop Stitt’s plan from moving forward. 

The health groups argue that neither Stitt nor the Oklahoma Health Care Authority had the power to unilaterally contract with the managed care firms without first gaining approval from the Legislature.

While that lawsuit plays out, lawmakers could also pass a bill to prevent or change how managed care can be offered in Oklahoma. Two groups of Republican House and Senate have already come out against managed care. The plan has also been criticized by the Oklahoma Democratic Party. 

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