managed Medicaid
The OU Medical Center would see reduced Medicaid funding if a new federal rule were triggered by Oklahoma's impending implementation of a "managed care" program. (William W. Savage III)

A leading House Republican thinks Oklahoma needs to pump the brakes on an impending plan to privatize part of the state’s Medicaid program.

A new federal rule could cause the state to lose up to $650 million in supplemental payments if the Oklahoma Health Care Authority moves forward with the privatized managed-care program being considered for aged, blind and disabled (ABD) beneficiaries.

“As a policymaker and a Legislator, I do everything I can to follow the Hippocratic Oath: First, do no harm,” House Floor Leader Jon Echols (R-OKC) said April 10 in his office. “There seems to me to be a simple answer, and that is to hit the pause button.”

The Centers for Medicare and Medicaid Services issued the new rule in January. It would limit pass-through (aka supplemental) payments for any state that adopts a new managed-care model. Oklahoma has been pursuing a managed-care model for ABD SoonerCare enrollees as an attempt to lower costs associated with that patient population. The effort stems from a legislative directive that Echols said he voted for at the time.

But that was prior to the new CMS rule and the threat of unintended consequences.

“I think we just need to pause and figure out what’s going to happen,” Echols said. “There are those that I’ve talked to that believe vehemently that the federal regulation will either be repealed or will not apply to our program, and they may be correct. There are those that believe the federal regulation will be applied to our program and we will lose provider rates, and they may be correct.”

Nico Gomez, the OHCA’s former CEO who now heads up a trade association for long-term care facilities, said such uncertainty should lead people to be extra cautious.

He emphasized that he does not want to second guess anyone at the state agency where he worked for 16 years, but he does want awareness from OHCA and Gov. Mary Fallin that the threat of lost funding exists.

“I’m hoping at least they look at the issue,” said Gomez, president and CEO of the Oklahoma Association of Health Care Providers. “If they do and they’re wrong, that’s potentially a $650 million mistake. That’s not the sort of mistake I’d want to make.”

Dollar amounts differ for potential savings

Echols is not the only lawmaker who has a position on what should be done about the managed-care plan. Some are inclined to see it move forward, while others have opposed it from the start.

“I think the [request for information] we received and the reason we went forward with it was the huge potential savings,” said Rep. Glen Mulready (R-Jenks). “Now, will this savings be reduced? Potentially. But other states have solved this issue, Massachusetts in particular.”

Mulready also expressed skepticism about the $650 million figure cited by Gomez. In contrast, the Oklahoma Health Care Authority has offered different numbers that could be lost and is “evaluating the impact.”

“While the agency estimates that the portion of the supplemental payments that is linked to these (ABD) members is at least approximately $105 million annually, it has reached out to providers to create new funding mechanisms to replace these dollars in a manner that can be approved by CMS,” said OHCA public information director Jo Stainsby in a statement to NonDoc.

The difference between $650 million and $105 million would lie in how CMS interpreted its own rule regarding supplemental and pass-through financing.

For his part, Gomez said arguments over the specific amount of funding in jeopardy miss the point.

“The $650 million is, in my opinion, right, because those are the pass-through numbers,” Gomez said. “But whether it’s $1 or $1 billion, it’s too much to say we don’t need it.”

Echols: ‘We need to have some caution’

In a budget year where lawmakers are trying to fill yet another enormous funding hole, Gomez’s perspective hits home with Echols. He and other House leaders are focused on trying to generate revenue just to hold the OHCA harmless from funding reductions, and every state dollar lost decreases the amount of federal funding SoonerCare can draw.

In short, Echols knows less money for OHCA means less access to care for lower-income individuals and families.

“Right now, we need to have some caution because the State of Oklahoma can’t do anything that would hurt our access to care. We are in crisis mode,” Echols said. “One of the problems we have in medical care right now is the health spiral. So you don’t have coverage, which means you don’t get the care you need, which means you get sicker, which means you end up in the emergency room, which means it costs more money to treat you.”

For his part, Echols has spent more time experiencing Oklahoma’s health care system over the past two years than he wanted to. Last session, he routinely traversed Lincoln Boulevard between the State Capitol and the OU Health Sciences Center where his mother, Eileen Echols, was receiving treatment for breast cancer that had metastasized. She died June 30, 2016, at age 65.

“I was incredibly close to my mom. I jokingly say, mom was a better version of me in every way,” Echols said. “Mom grew up first in her generation ever to go to college. She grew up very poor in south Oklahoma City.”

Eileen Echols, the late mother of Rep. Jon Echols (R-OKC), was recognized Saturday, April 17, 2017, at a Susan G. Komen event. The organization named its "Inspire" award for her. (Facebook)
Eileen Echols, the late mother of Rep. Jon Echols (R-OKC), was recognized Saturday, April 17, 2017, at a Susan G. Komen event. The organization named its “Inspire” award for her. (Facebook)

Echols said he learned “a lot” during his mother’s treatment. The experience left him appreciating physicians at the Stephenson Center as well as the struggles faced by many families that don’t have the same insurance or means that his does.

“To OU’s credit, they figured out I was there every day,” Echols said. “I learned that cancer treatment is hard. It’s just tough. It was tough on mom, tough on the family.”

He spoke of how much tougher it is for families without insurance.

“It’s debilitating. With insurance, your deductibles are just astronomical. If you do survive, you’re in debt in a very large number,” Echols said. “But without it, the access to care is just so much more difficult. A catastrophic event like cancer, it’s more than someone of means could afford to pay. The costs are just out of this world.”

Echols said the costs for treating uninsured Oklahomans are dramatic and affect hospitals’ bottom lines.

“They eat a ton of it,” Echols said of uncompensated care. “OU eats and those physicians eat tons of care because, again, it’s a humanitarian issue. We need to take care of these people.”

Standridge: ‘It will be a complete disaster’

Just how Oklahoma will be taking care of lower-income citizens remains up in the air. Sen. Rob Standridge (R-Norman) hopes it won’t be through the pending managed-care model, which he has opposed since the idea’s inception.

“It will be a complete disaster. Look at Iowa. In the first six months, they had to come up with an extra $127 million,” Standridge said. “Look at Florida. If Oklahoma went down the same path as Florida, our rate per patient would probably go up about $1,000 per year and would cost us about $1 billion. Maybe that won’t happen, but it’s certainly happening in other states. So it’s a concern.”

Neither Standridge nor Echols has supported expanding Medicaid. Echols said his position on that topic has also shaped his belief that the managed-care proposal should be paused.

“If we’re being consistent, I’ve come out and said now is not a good time to expand Medicaid because there is too much uncertainty on the federal level,” Echols said. “Well, if I take that position as to the expansion of Medicaid, I feel like I have to take that position as to the expansion of managed Medicaid in Oklahoma. There are some knowns. The rule looks very ominous if we continue down that path.”