In 2011, the Oklahoma Legislature passed the Supplemental Hospital Offset Payment Program (SHOPP), also known as HB 1381, to allow hospitals to provide additional funding to the state that could be used to draw down federal matching funds up to the federal upper payment limit (UPL). This limit refers to the maximum amount that the federal government will match for the payment of certain services and is equivalent to what Medicare would pay for those services. At the time, Oklahoma hospitals were receiving an average of 67% of the Medicare payment rates through Medicaid. The SHOPP program is similar to provider fee programs that have been implemented in 49 other states.
In 2020 and 2021, the SHOPP assessment rate was set at 2.3% and 2.11%, respectively, of annual net patient revenue. However, these rates were reduced due to increased federal matching rates as a result of the public health emergency and the American Rescue Plan Act (ARPA), which provided additional funding to states that expanded Medicaid in 2021 or later. For 2022, the assessment rate was set at 3% by Senate Bill 1045, which also established a rate of 3.5% for 2023 and 4% for 2024 and beyond.
The SHOPP assessment for 2022 was projected to generate approximately $247 million in funding for the state, used to draw down $343 million in federal funding for a total of $590 million. Of this total, $500 million is paid to hospitals as supplemental payments for the care provided to Medicaid (SoonerCare) patients to cover the unreimbursed costs of their care. The remaining $90 million is used to maintain SoonerCare payment rates for physicians and other Medicaid providers to ensure access to care.
The SHOPP Act previously had a sunset date, but this date has now been removed. This means that the SHOPP program will continue indefinitely unless it is explicitly terminated or amended by the state Legislature.