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Capitol Insider: Supreme Court Shoots Down Managed Care Plan

Oklahoma Supreme Court

Governor Kevin Stitt wanted to use a managed care approach to handle Oklahoma's Medicaid program, SoonerCare, with expansion of Medicaid mandated by a vote of the people in 2020. Legislators were skeptical and placed limits on the approach through passage of Senate Bill 131. Now, the Oklahoma Supreme Court has weighed in and invalidated the managed care approach altogether in litigation brought by the Oklahoma State Medical Association, Oklahoma Dental Association, Oklahoma Osteopathic Association, Oklahoma Society of Anesthesiologists and the Oklahoma Chapter of the American Academy of Pediatrics. KGOU's Dick Pryor and Shawn Ashley discuss what happened and what's likely to result in this week's Capitol Insider.


Dick Pryor: This is Capitol Insider, your weekly look inside Oklahoma politics, policy and government. I'm Dick Pryor with eCapitol news director, Shawn Ashley. Shawn, less than a year after voters approved Medicaid expansion, the Oklahoma Health Care Authority began accepting applications for that program. And already it appears to be very popular.

Shawn Ashley: That's right. Applications opened up on June first and officials expect up to two hundred thousand people to enroll in the program. Through the first two days, approximately thirty thousand individuals had enrolled and qualified for benefits, so they're already off to a fast start.

Dick Pryor: Governor Stitt was planning for Medicaid expansion to be administered through a managed care system with private companies handling it. How did he see this working and why did many legislators oppose it?

Shawn Ashley: The Oklahoma Health Care Authority went through a request for proposals process, and back in January they selected four companies to provide managed care services to Medicaid beneficiaries. In a manner of speaking, they were to serve as guides or overseers of the care those beneficiaries received. That, Governor Stitt said,  would help improve health outcomes for those Medicaid recipients. Oklahoma ranks low in health outcomes, generally speaking, and particularly among those who are on the Medicaid program. But legislators had several concerns. First, cost and how much money might be diverted away from patient care and to the middlemen, the guides or overseers between the patients and the care providers. And secondly, they were very concerned about those providers. Would they be paid enough for the services that they provide and would they receive those payments in a timely manner? Those were two problems that doomed Oklahoma's managed care program back in the 1990s.

Dick Pryor: And, those concerns were expressed by legislators on both sides of the aisle. Now, the Oklahoma Supreme Court has struck a blow to the governor's managed care plan by determining it was enacted without appropriate legislative authority. What did the Supreme Court rule?

Shawn Ashley: You really hit on the key words there in the Supreme Court decision: appropriate authority. The court noted that State Question 802, which as we mentioned earlier was approved less than a year ago, did not authorize the managed care plan. The court also pointed out that the Health Care Authority did not have legislative authorization to implement a managed care plan. And the court also noted that the Health Care Authority did not have administrative rules in place for the request for proposal process and the selection of the managed care providers for their managed care plan. The court said, “We find the actions of the Oklahoma Health Care Authority are invalid under Oklahoma law.”

Dick Pryor: So, with managed care invalidated, what happens now?

Shawn Ashley: It appears that discussion is actually going to continue. Governor Stitt suggested that the legislature's passage of Senate Bill 131, which its authors said would put guardrails around the managed care program, the governor said that indicates that lawmakers agree with him that managed care is the right path forward. But Senator Greg McCortney and Representative Marcus McEntire, the authors of Senate Bill 131, didn't seem to agree with the governor's assessment. And McEntire said it is time to bring all the stakeholders together to negotiate a deal that protects both providers and provides patients quality care.

Dick Pryor: Mm hmm. On another topic, an interesting development is occurring among statewide elected officials. Attorney General Mike Hunter has resigned. State Treasurer Randy McDaniel is not running for reelection in 2022 and State Superintendent Joy Hofmeister is term limited. So new faces will be emerging, at least in the race for those three elective offices. How do these kinds of openings potentially affect the legislature, since legislators tend to gravitate toward statewide offices?

Shawn Ashley: They do, don't they? Hunter and McDaniel are former legislators and incumbent labor commissioner Leslie Osborn and incumbent insurance commissioner Glen Mulready are also former legislators. You know, some legislators may use the 2022 legislative session to position themselves for a run for one of these offices. So, if you see a lawmaker who's never filed pension legislation do that, they may be positioning themselves for a run for state treasurer, for example. And if that happens, it has a domino effect. As they run for those higher offices, their legislative seat becomes vacant. And we could see some new faces there as well.

Dick Pryor: And one thing is certain – we’ll be watching.

Shawn Ashley: You bet we will.

Dick Pryor: Thanks, Shawn.

Shawn Ashley: You're very welcome.

Dick Pryor: And that's Capitol insider. If you have questions, e-mail us at news@kgou.org or contact us on Twitter @kgounews and @ecapitol. You can also find us online at kgou.org and ecapitol.net. Until next time, with Shawn Ashley, I'm Dick Pryor.

Dick Pryor has more than 25 years of experience in public service media, having previously served as deputy director, managing editor, news manager, news anchor and host for OETA, Oklahoma’s statewide public TV network. He was named general manager of KGOU Radio in November, 2016.
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