State seeks bids to outsource Medicaid spending
The Oklahoma Health Care Authority on Thursday took initial steps toward privatizing health care for many of the state's poorest residents.
The agency that oversees the state's Medicaid program published two requests for proposals seeking for-profit companies to oversee medical and dental spending for 773,794 of the state's nearly 1 million Medicaid recipients.
Following direction from
Gov. Kevin St itt, the agency is pursuing what is often referred to asama naged-care Corbett model, an
approach to health insurance coverage that seeks to maximize health care quality while cutting costs. The program will be called SoonerSelect.
At least 40 other states have implemented managed care.
With Oklahoma ranked 46th in health outcomes, the Health
Care Authority (OHCA) can do better, said Kevin Corbett, the agency's CEO.
“It's clear what we've done in the past is not working as well as we desire, and it is time for Oklahoma to try a new approach in order for us to provide the quality of health care Oklahomans deserve,” he said.
Some Republican legislators and medical professionals have expressed early concerns about the proposed changes.
Ahniwake Rose, executive director for the Oklahoma Policy Institute, criticized the shift in care. The Tulsabased think tank supported State Question 802 to expand Medicaid in Oklahoma.
"OHCA has a great t rack record for delivering lowcost, efficient management of our Medicaid program," she said. "Turning to managed care — which has shown to be infeasible in Oklahoma —is merely an expensive solution in search of a problem. Gov. Stitt and the OHCA administration would be better served carrying out the will of Oklahoma voters by putting their full energies into implementing Medicaid expansion as quickly as possible."
Healthcare for the estimated 175,000 Oklahomans who will sign up under the expansion will be outsourced.
The authority anticipates contracting with at least two managed care companies, but Corbett said three or four providing coverage options would be optimal.
They will manage care for the following Medicaid populations:
• Children
• Pregnant women
•Parent and caretaker relatives
• Former foster children
• Juveniles in foster care
• Low-income adults who will be covered by Medicaid expansion
Over time, the Health Care Authority may phase in additional Medicaid populations, such as the aged, blind and disabled.
Essentially, the state will pay the contracted companies to manage care for the Medicaid recipients. The compensation rate, which will be release data later point, will be based on the number of enrollees.
Corbett said he doesn't anticipate the change will result in any cost increases to the state.
The set payments drive managed care companies to drive down costs so they can earn profits.
The managed care concept is centered on the idea that if patients get more coordinated care, severe and potentially costly health problems can be caught early or prevented altogether. But critics of t he concept say t he profit motive can deter companies from doing what's best for patients, especially when a necessary prescription or treatment is costly.
Corbett pointed to Georgia, where babies were more than twice as likely to get six or more checkups during the first 15 months of their lives under a managed care model than a traditional, fee-forservice Medicaid model.
Unlike st ates, Managed care companies can also offer financial incentives for beneficiaries to keep up with their care, Corbett said. He gave an example of companies giving gift cards to patients who attend preventative care appointments.
Asked whether the quality of care could suffer when Medicaid care is privatized, Corbett said the Health Care Authority has put a number of checks in place to ensure access to care and quality service.
“Anytime you are partnering with somebody to take on a part of your business that you have full control of, there is a risk that you need to recognize,” he said. “We built in, we believe, a number of safeguards to ensure that there is not a dilution of care."
Over the next year, the Health Care Authority will transition into a sort of watchdog agency with strict oversight of the chosen managed care companies to make sure they are meeting their contract obligations, Corbett said.
The 400-page request for proposals for medical providers asks for extensive information information from the companies that bid. The contracts are contingent upon funding from the Oklahoma Legislature.
The chosen companies will offer plans statewide, as opposed to Oklahoma's previous experience with managed care when, under Sooner Care Plus, plans were offered to residents in Oklahoma City, Tulsa and Lawton.
The companies will also take over management of prescription drugs for most Medicaid beneficiaries.
Some lawmakers sought f or pharmaceuticals to be carved out of them anaged care contracts because the Legislature recently approved legislation regulating pharmacy benefit managers in order to give
Oklahomans more freedom in where they get their prescriptions. In a letter Re p.M arc usMc Entire, R-Duncan, wrote to Stitt, he said Oklahoma has an exemplary system for managing pharmaceuticals.
"There is a better way to do pharmacy management and we are doing it, already," he wrote. "I urge you to consider Oklahoma' s innovation in this area."
Pharmacy management was included because it's key to the overall coordination of care for the managed care companies, Corbett said.
Contractors will be required to maintain a presence in Oklahoma and have an office with key staff in or near Oklahoma City. The bidding process is not limited to just Oklahoma companies.
The contracts will be for one year with annual options for renewal. Corbett says the agreements will be structured based on a five-year commitment.
"Our intent is for this to be a long-lasting partnership," he said.
The agency plans to award contracts in February. Open enrollment for Medicaid beneficiaries will occur in August and the changes will take effect in October 2021.