Oklahoma Medicaid Transformation

Oklahoma Medicaid Transformation

Governor Stitt signed SB1337 on May 26, 2022. The legislation transitions the Medicaid benefit from Fee-for-Service to Managed Care for selected populations. The Medicaid Transformation for selected populations will begin no later than October 1, 2023. However, the Oklahoma Health Care Authority (OHCA) will not implement the transformation until they receive written confirmation from CMS that a managed care directed payment program for hospital services has been approved for year 1.  

There are three types of plans that will be moving to a capitated contract model. The “Selected Populations for Medicaid Transformation Plan” will be the group with the most lives. This group will include pregnant women, children, deemed newborns, parents and caretaker relatives, and the expansion populations.  Aged, blind, and disabled populations that are eligible for SoonerCare will be excluded from the transformation to capitated contracts and continue to be covered by fee-for-service Medicaid. They can be included only if expressly authorized by the legislature.

Populations

There are three types of plans that will be moving to a capitated contract model. The “Selected Populations for Medicaid Transformation Plan” will be the group with the most lives. This group will include pregnant women, children, deemed newborns, parents and caretaker relatives, and the expansion populations. Aged, blind, and disabled populations that are eligible for SoonerCare will be excluded from the transformation to capitated contracts and continue to be covered by fee-for-service Medicaid. They can be included only if expressly authorized by the legislature. There is also a Children’s Specialty Plan which covers children in foster care, former foster care children up to the age of 25, children involved in juvenile justice, and children receiving adoption assistance. Dental managed care populations include pregnant women, children, parents and caretaker relatives, the expansion population, and members of the children’s specialty plans.

Capitated Contract Awards for Selected Populations

Capitated contracts will be awarded to covered entities. That includes accountable care organizations, provider-led entities, commercial plans, dental benefit managers, or any other entity as determined by the authority. Provider-led entities are covered entities that will be given preferential treatment in the RFP process.

OHCA must issue an RFP for partnerships with covered entities to cover all Medicaid services except dental. There will be a separate RFP for dental benefit managers to include the children’s specialty plan. The services that will be covered are physical health, behavioral health, and prescription drug services. Physical health services include, but are not limited to primary care, inpatient and outpatient services, and emergency room services. The Authority shall develop and implement a process for assignment of Medicaid members to contracted entities.

Before Governor Stitt’s managed care plan was struck down, OHCA had awarded contracts to four major health plans. Blue Cross Blue Shield, Humana Healthy Horizons, Oklahoma Complete Health (a subsidiary of Centene) had been selected for the children’s specialty plan, and United Healthcare were each awarded contracts. A deviation from Stitt’s plan is that preference will be given to provider led entities using a scoring methodology that will be developed by the Authority. Contracts can only be awarded as a result of a request for proposals from OHCA and responses to the RFP.

Three statewide contracts will be awarded for integrated health services. Services would include, but not be limited to medical, behavioral health, and pharmacy services. This is along with two statewide capitated contracts to provide dental coverage. Out of these three contracts at least one must be awarded to a provider led entity. This creates a floor, not a ceiling, so there could be more provider led entities, especially considering the preferential scoring methodology. Before awarding the contract, the provider led entity must demonstrate that they can fulfill the requirements of the RFP. Also, if a response is not submitted from a provider-led entity the authority would not have to contract with one.

Pharmacy Benefit for Selected Populations

Oklahoma has a tiered system by which they administer a supplemental rebate program. They administer an open formulary subject to the provisions of Section 1927 of the Social Security Act. Oklahoma utilizes a prior authorization system, but it is not the same as a formulary. They are also members of the Sovereign States Drug Consortium. 

The pharmacy benefit through managed care has some characteristics in common with a preferred drug list. All contracted entities will use the same drug formulary, which shall be established by the Authority. The contracted entity shall not require prior authorization on any covered prescription drug for which the Authority does not require prior authorization.

The contracted entity will make determinations on requests for covered prescription drugs. They have 24 hours to make a determination on requests for covered prescription drugs that are required to be prior authorized by the Authority. The authority will establish procedures for enrollees or providers to seek review from a contracted entity. Providers have six months from the receipt of the claim denial to file an appeal. Upon receipt of notice from the contracted entity that an adverse determination has been upheld on appeal, the enrollee or provider may request a fair hearing from the Authority that will develop procedures for fair hearings. The rate paid to participating pharmacy providers will be the same as the fee-for-service rate unless the participating pharmacy provider elects to enter into other alternative payment arrangements. Contracted entities must ensure broad access to pharmacies including pharmacies contracted with covered entities under 340B.

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