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Fate of Medicaid privatized managed care uncertain after Oklahoma Supreme Court ruling

Fate of Medicaid privatized managed care uncertain after Oklahoma Supreme Court ruling

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State Treasurer Randy McDaniel said gross receipts to the treasury were up 19.5% over the same month a year ago and that longer-term trends were also positive. That outlook, however, was tempered by a resurgence of COVID-19.

OKLAHOMA CITY — The fate of privatized managed care for Medicaid patients in Oklahoma remains up in the air.

The Oklahoma Supreme Court in a recent 6-3 decision invalidated the more than $2 billion in contracts the state’s Medicaid agency, the Oklahoma Health Care Authority, signed with companies.

The state’s high court, among other things, ruled the agency did not have legislative approval or promulgate rules.

But of note is a dissenting opinion, by Justice James R. Winchester, that said the Legislature’s passage of Senate Bill 131 resolves the legal question because it authorized it.

Justices Dustin Rowe and John Kane IV joined the dissent, saying they would seek plaintiffs to show why the matter is not moot in light of Senate Bill 131 becoming law.

Senate Bill 131 became law without Gov. Kevin Stitt’s signature, who criticized it in his veto message.

“I appreciate the Legislature’s recognition that managed care is the best path forward for our state via the authority of the Oklahoma Health Care Authority retains,” Stitt said in allowing it to become law without his signature. “However, I have concerns that SB 131 will likely increase costs and limit our ability to improve health outcomes comparted to the original plan I proposed and this bill could also make it more difficult to detect waste, fraud and abuse in our Medicaid system.”

The measure put guardrails in place for managed care.

Sen. Greg McCortney, R-Ada, and Rep. Marcus McEntire, R-Duncan, were the authors of the measure. Both opposed the version of managed care put forward by Stitt.

“I believe what the governor will do is probably use Winchester’s dissenting opinion for a springboard for his next move,” McEntire said. “I think the Oklahoma Health Care Authority will most likely go back in and quickly promulgate emergency rules and try to rebid those requests for proposals.”

Winchester is married to Susan Winchester, a former Republican House member Stitt recently named as Secretary of Licensing and Regulation.

“The concern with that is the Oklahoma Health Care Authority still doesn’t have the legislative authority to do that,” McEntire said.

If McEntire is correct, he said the issue will likely wind up back in court. He said he wouldn’t be surprised to see the petitioners, several health care organizations that brought the suit, seeking an injunction to get it stopped.

The Oklahoma Health Care Authority referred questions about the matter to Stitt’s office, which shifted inquiries about it to the agency and a statement Stitt issued earlier.

“The Supreme Court’s ruling will unnecessarily delay Oklahoma’s efforts to improve health outcomes through managed care, which the Legislature confirmed is the right path forward for our state through Senate Bill 131,” Stitt said. “I will continue to work with the Oklahoma Health Care Authority to determine the next steps in the process.”

McCortney said the ball is in Stitt’s court, but his statement implies Senate Bill 131 gives him the authority to implement managed care, which is the furthest thing from what the Legislature intended.

Senate Appropriations Chairman Roger Thompson, R-Okemah, said getting managed care passed through the Legislature would be difficult.

McEntire said he was pleasantly surprised by the ruling.

“I believe this battle is far from over,” McEntire said.

Supporters of managed care believe it will create better health outcomes.

Critics say it will reduce rates for providers and create a shortage limiting access, especially in rural areas.

Plaintiffs in the suit were the Oklahoma State Medical Association; Oklahoma Dental Association; Oklahoma Osteopathic Association; Oklahoma Society of Anesthesiologists; and Oklahoma Chapter of the American Academy of Pediatrics.

Kevin Corbett, Oklahoma Health Care Authority CEO, and the agency were defendants.


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