Capitol

OKLAHOMA CITY — The governor’s push to outsource the state’s Medicaid program hit another roadblock this week after the state’s highest court ruled that the Oklahoma Health Care Authority pressed forward without proper legislative authority.

The Oklahoma Supreme Court’s 6-3 managed care ruling sends Gov. Kevin Stitt back to the drawing board. Some lawmakers and others were still studying the ramifications of the decision.

“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 in a statement Wednesday.

Stitt also said he will continue to work with the Health Care Authority to determine the next steps.

A coalition of medical and dental advocacy groups, including the Oklahoma State Medical Association, had sued the Health Care Authority and the state in February on the grounds that it lacked the proper legislative authority to implement the new program known as SoonerSelect. The lawsuit requested that the court invalidate nearly $2.2 billion in contracts that had been unlawfully awarded.

Stitt and the Health Care Authority had been pressing forward for nearly a year with plans to outsource the state-run program in what they said was an effort to improve health outcomes for the roughly 1 million lower-income Oklahomans, pregnant women and children, and to stabilize costs for the state.

Kevin Corbett, CEO of the Health Care Authority, said in a statement that he was “disappointed” with the ruling. He did not comment on whether Senate Bill 131 might allow managed care going forward.

Senate Bill 131 was designed to put guardrails in place for the managed care program in an effort to protect providers and patients. Supporters said it essentially placed what was in the state’s now invalidated managed care contracts into law. Last week, Stitt let the bill go into effect without his signature. He said at the time that he was concerned that it would increase costs and hamper the state’s ability to improve health outcomes.

State Sen. Greg McCortney, R-Ada, said the measure amounted to “a hold your nose” bill because the majority of lawmakers didn’t want a managed care program. McCortney, the Senate author, also said the measure was not intended to legalize managed care.

“Now that we know he didn’t have that authority, we never would have passed (Senate Bill) 131,” McCortney said.

McCortney said the bill’s language should be null and void because the state’s highest court invalidated the contracts it was responding to.

Patti Davis, president of the state Hospital Association, said her organization believes that the law did not grant the Health Care Authority the ability to proceed with managed care when Senate Bill 131 takes effect Sept. 1.

“All session long, lawmakers expressed that they were limited in what they could do to stop the governor’s advancement of managed care, despite stiff opposition,” she said in a statement. “It was under this pretext that the Legislature moved forward with a robust guardrail bill that sought to protect patients and providers from insurance companies. The court’s ruling makes it clear that the legislative branch must be involved in such important decisions, especially involving access to care for constituents.”

The State Medical Association is pleased with the Supreme Court’s ruling, said President Dr. Mary Clarke in a statement.

“We recognize the heart of this issue is much larger than managed care,” Clarke said. “It’s about ensuring that state agencies follow the law when spending Oklahoma’s tax dollars. Today’s ruling represents an important victory for transparency in government and Oklahoma’s taxpayers.”

She said the group is still studying how the ruling will impact the state’s efforts to implement managed care in the future.

State Rep. Marcus McEntire, R-Duncan, the House author, said it’s too early to know if Senate Bill 131 would inadvertently permit managed care. He said if it’s that easy to usurp the Legislature’s authority, Stitt can just wait until September.

McEntire though said he hopes the ruling will lead to a new deal that serves everyone.

“Now is the time to bring in all the stakeholders to negotiate a deal in good faith with everybody at the table, a deal that ensures our Medicaid members get the care they deserve and that our health providers are supported,” he said.

Janelle Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at jstecklein@cnhinews.com.

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