Stitt touts Medicaid management change

Gov. Kevin Stitt is defending his push to outsource management of the state's Medicaid program, one of his biggest policy achievements that Joy Hofmeister, his Democratic challenger, says she would work to undo if elected.

In a state plagued by poor health outcomes, some of the lowest rates of insured residents in the nation and a rural health system crippled by hospital closures and a shortage of healthcare workers, Stitt successfully pushed lawmakers to allow private entities to bid on managing SoonerCare, Oklahoma's Medicaid program that serves around 1 million low-income Oklahomans.

"We want better outcomes in health care and we want to hold hospitals accountable, that was the reason we changed that," said Stitt, while speaking to voters last month.

The state is currently in the process of soliciting bids for the management of Medicaid dental benefits, regular medical benefits and specialty plans for children in the custody of the state. Evaluations of the bids will take place over the next several months with final selections expected to be announced around March or April of next year.

But Hofmeister, who has called the "privatization" of SoonerCare management a "scheme," said she would not move forward with the plan if she became governor in January.

"We would not go further (with it)," Hofmeister told The Oklahoman.

Managed care model seen by the governor as a way to improve health outcomes

Because the governor can select a majority of the members on the Oklahoma Health Care Authority board, Hofmeister could effectively control whether bids are accepted to manage SoonerCare.

The governor also hires the agency's director, a power the state Legislature gave Stitt's office in 2019.

The disagreement over Medicaid reform between the top two candidates for governor not only signifies their differences on how much state functions should be given up to non-government entities but also highlights the claims each has made that their election would be best for improving Oklahoma's woeful health outcomes.

Oklahoma is a bottom 10 state in child health and life expectancy, and was one the hardest hit states by the coronavirus pandemic.

With some of the highest rates of poverty and lack of health insurance, access to health care in Oklahoma is a challenge for many, making the state's Medicaid program an important lifeline for about one-fourth of the state's residents.

"This is a pivotal time for health care in our state and Sooner Select is the significant opportunity to positively change lives for our fellow Oklahomans," said Kevin Corbett, Oklahoma secretary of health and mental health, referring to the name of the state's program that will outsource the management of Medicaid.

In 2021, Stitt pushed forward a managed care model that would privatize Medicaid, incentivizing providers to improve patient health. That effort was halted by the state Supreme Court, which said the governor needed Legislature approval in order to overhaul the Medicaid system.

This year, Stitt was able to get approval from lawmakers for a similar managed care program, which will contract with up to three entities.

The state will give preference to local providers in awarding the contracts, and each would be paid a flat fee for every person covered, with the idea that the providers will have a financial incentive to improve health care outcomes.

"We've set up a system under the belief that value-based care is a better way for us to improve the health outcomes of the people of Oklahoma than what we have been doing," Senate Floor Leader Greg McCortney, the bill's author, said when the program was approved in May.

Stitt sees the push to managed care as the best way to improve health outcomes. He said the new program would closely monitor various health metrics and hold providers more accountable.

"I have a vision to make Oklahoma a top 10 state in everything that we do," Stitt said earlier this year when the new program was announced. "We track all the different metrics, whether it's roads and bridges, or tourism or the economy visits to our state. Health is certainly at the top of the list."

While managed care may work for larger hospitals and those part of a larger system, Hofmeister believes smaller facilities will have a "much harder time with the new payment process," she told The Oklahoman.

Because hospitals will get a flat amount per patient, Hofmeister said small hospitals that see just a handful of really sick patients could be devastated financially.

"It's going to lead to more hospitals closing or keep getting swallowed up by the bigger systems," Hofmeister said.

Hofmeister said she was unsure what specific steps she could take to stop managed care from being implemented but that she would consider all options.

The Oklahoma Health Care Authority board is required to approve the agency's ability to fund the contracts but will not have to approve the selection of contracts. That responsibility will fall to an evaluation team with the agency that will include the agency director, a governor appointee.

Because the switch to managed care also requires approval from the federal Centers for Medicare and Medicaid Services, a new governor calling for a pause could also result in the federal government holding approval.

The state has an aggressive goal of launching the new model of care by next October, so any delays could push back the start date, although state officials said there would never be a disruption of care to Oklahomans.

Candidates want to increase the healthcare workforce

Also challenging the state's healthcare industry is a shortage of skilled workers, including nurses and doctors. The shortage has been especially severe in rural Oklahoma.

Shelly Wells, president of the Oklahoma Nursing Association, told lawmakers last month that the state has needed more nurses for decades but the problem is reaching crisis level.

"We now find ourselves in the middle of a critical (nursing) workforce shortage that has been exacerbated by the pandemic," Wells said.

Stitt has played up his efforts to hire more nurses when talking to voters, including his push to get the University of Oklahoma to accept more nursing students.

During a speech last month, Stitt said the state had plenty of applicants, but the University of Oklahoma would not accept them all.

"Sometimes academia gets in their own head. They don't think like a business person," Stitt said. "I just hammered them and said you've got to accept them all."

This year, the University of Oklahoma nearly doubled the number of new nursing students it accepted.

Supporters of the state's new managed care model say it would also help retain doctors in the state because the program includes increased payments for physicians who meet specific health metrics.

Stitt also recently endorsed a plan to increase the income cap for expecting mothers to receive Medicaid coverage, and a plan to extend postpartum coverage from 60 days to 12 months.

Hofmeister said the idea is something she has pushed for the entire campaign and was long overdue.

"I would have already been looking for ways to expand care for Oklahomans," Hofmeister said. "That's something we could have done for a long time now."

Oklahoma state government reporting is supported in part by a grant from the Kirkpatrick Foundation. The Oklahoman retains editorial control. To support work like this, consider purchasing a digital subscription to the Oklahoman today.