McEntire’s aim to spike Stitt’s Managed Care plan carries $1.2B price tag

Pat McGuigan
Oklahoma City – Senate Bill 131 originated as a proposal from state Senator Jessica Garvin, a Duncan Republican. It was a 15-page outline for adapting, in light of experience in recent years, state laws governing “the sale, manufacturing or packaging of dangerous drugs.”

In early April, with a committee substitute offered by state Rep. Marcus McEntire, also a Duncan Republican, S.B. 131 was transformed into an entirely new proposal aiming to oppose Governor Kevin Stitt’s planned Managed Care of Medicaid Expansion.
On April 21, the state House sent the CS (committee substitute) for S.B. 131 back to the upper chamber.
A new Oklahoma State Senate staff analysis of the fiscal impact of the McEntire-amended version of Senate Bill 131, asserts that “Although S.B. 131 does not expressly prohibit third-party managed care through SoonerSelect, in order to build a state-run managed care delivery system, the agency would require a significant investment that would continue for several years.

“Simply put, although OHCA [Oklahoma Health Care Authority] operates a limited care management program, OHCA does not currently have the personnel, infrastructure or technology needed to coordinate care at such a level to immediately provide SoonerCare members increased opportunities to access appropriate, quality care and improve poor health outcomes, while still controlling costs via a capitated per-member per-month cost.
“This fiscal impact reflects a 5 year investment, however similar investments would be needed every year to continue building and sustaining infrastructure and maintaining a state-wide staff. This estimate accounts for additional personnel, upgraded IT systems, data analytics, infrastructure needs, web portals/tools to reach members, etc. Administrative costs for the agency will increase to around 11% of the budget.” 
The staff analysis notes: “An average of $263,400,000 would be needed every year for at least the first several years.”

In brief, that is more than $1 billion of increased spending within the Oklahoma Health Care Authority over the course of four-five years. Creation of a new internal managed care system would take three years, while implementation would stretch over a 4-5 year period.

Voter-mandated Medicaid Expansion must begin July 1, and Gov. Stitt’s plan to work with Managed Care Organizations (MCOs) would be operational by October 1 (pending federal approval).
MCOs already operate in 40 of the 50 states.

Creating a managed care framework within OHCA would require two to three years, at a minimum, with five years likely and ongoing long-term expenses.

Critics of the McEntire measure argue Oklahomans do not want an all-government single-payer system, and that Oklahoma’s expanded Medicaid would work better as a public-private partnership, with MCOs providing expertise needed to fashion both better health outcomes and cost discipline over the decades ahead.
Gov. Stitt denounced the House Committee Substitute expressing disappointment that the majority, including many Republicans, “voted to grow government and spend $1.2 billion of taxpayer money over five years on a one-way ticket to Joe Biden’s socialized health care plan in order to please the Oklahoma Hospital Association.”

Note: This report first appeared in the Southwest Ledger, April 29, 2021 print edition and online: Southwest Ledger, 7602 US Highway 277, Elgin, OK 73538, (580) 350-1111. It is reposted here with permission.