Outsourcing Medicaid

In 2014, the Oklahoma Legislature considered proposals that would outsource Medicaid to private insurance companies by 2016. Proposals under consideration would have required the Oklahoma Health Care Authority (OHCA) to seek a federal waiver to implement a Medicaid program that is integrated managed care for all covered services, including long-term care services. Two bills were the primary House and Senate bills. After passing in the house of introduction, both bills died in the opposite house because they did not receive committee hearings.  Following is a description of action on these bills as they moved through the process:

HB 1552 (McCullough/David) passed the House in the 2013 legislative session.  Once it was clear that efforts to outsource Medicaid lacked legislative support due to mounting opposition from hospital CEOs, physicians and other health care providers, HB 1552 was going to be used to remove the authority of the OHCA Board and make the executive director appointed by the governor. OHA raised objection and was joined by our partners. OHA believes passage of this proposal would be a step closer to outsourcing Medicaid, thereby putting control of decisions about patients and providers in the hands of out-of-state insurance companies instead of a state board representing Oklahomans. 

SB 1495 (David/McCullough) was stripped of the introduced language to outsource Medicaid. The bill was amended to direct the OHCA to develop and implement a pilot program to begin no later than Jan. 1, 2016, and passed in the Senate after many questions and much debate by a vote of 25 ayes to 21 nays.  OHA and our partners opposed the pilot.

During the Senate floor debate on SB 1495, Sen. David noted in her closing arguments that Oklahoma pays the highest provider rates in the nation but has the lowest health outcomes. David said the program would promote preventative care over simply treating patients for their immediate problems (eCapitol News, March 13, 2014). In the lobby effort in opposition to Medicaid outsourcing legislation, OHA members, along with physician and nursing home partners, pointed out to Senate and House members several facts about our current Medicaid program, including:
  • To ensure an adequate physician network, OHCA has increased physician rates to a level comparable to Medicare rates. These rates must be maintained.
  • SHOPP’s current supplemental payment program would terminate if the state were to enact an outsourced Medicaid program. This helps OHCA pay physicians more fairly, and these supplemental payments enable many rural hospitals to operate in the black.