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Oklahoma Health Authority Weighs $252 Million In Medicaid Cuts

Lora Zibman
Flickr Creative Commons

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.

Oklahoma Watch is a non-profit organization that produces in-depth and investigative journalism on important public-policy issues facing the state. Oklahoma Watch is non-partisan and strives to be balanced, fair, accurate and comprehensive. The reporting project collaborates on occasion with other news outlets. Topics of particular interest include poverty, education, health care, the young and the old, and the disadvantaged.
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