OKLAHOMA CITY - Debate over the future of Oklahoma's health care system is heating up as legislators and medical professionals argue about the wisdom of a gubernatorial plan that seeks to overhaul the state's insurance delivery method.

"It's the most divisive issue at the state Capitol," said state Sen. Greg Treat, R-Oklahoma City, Senate president pro tem. "It has been for a couple of years. My caucus is fairly evenly divided. I personally am agnostic on the delivery system as long as we can try to control costs and also ensure better health outcomes."

The state's Health Care Authority has been pressing forward since June 2020 with plans to outsource its state-run Medicaid program to four different insurance companies in an effort to improve health outcomes and stabilize costs.

The managed care proposal though is facing strong pushback from Republicans and Democrats alike who say it will do little to improve health outcomes for roughly 938,000 lower-income Oklahomans, pregnant women and children currently enrolled in SoonerCare.

Republican Gov. Kevin Stitt has vocally championed the change and insists that it's not political.

"Business as usual will not make us a top 10 state," he said. "Changing how we deliver health care to Oklahomans is the right path forward."

He said Oklahoma ranks 46th in the nation in health outcomes, having some of the worst obesity and diabetes rates, the third most deaths from heart disease and the sixth highest smoking rates in the country.

Stitt said the longer officials wait to tackle lagging health outcomes, the further the state will fall behind.

Supporters note that 40 states - including all that have expanded Medicaid - have adopted similar managed care models. They argue that the state's Health Care Authority will partner with the insurance companies and will provide continued oversight.

Just days into the session, the issue is already facing bipartisan opposition from lawmakers. Stitt ultimately needs the Legislature to fund the multi-billion dollar program for it to proceed.

State Sen. Rob Standridge, R-Norman, said that when the state previously tried a similar managed care approach, lawsuits flew after pediatricians, cardiologists and other physicians refused to participate because a middleman took part of the reimbursement rates. Medicaid patients, meanwhile, couldn't find care.

Under the current process, physicians, pharmacies and dentists bill Medicaid directly for the services provided.

Under the new plan, Standridge, a pharmacy owner, said about 15% to 20% will be carved out for the managed care companies, meaning physicians receive less compensation for treating Medicaid patients.

"The theory is it's supposed to help with outcomes and save costs, but the reality is it does neither," he said. "Every health care professional in this state that I know of says it's a horrible idea, both from past experience and looking at other states."

He said rural pharmacies, which often have about 30% to 40% of their clientele on Medicaid, as well as small physicians and dentists will likely have to close their doors because of reimbursement declines.

"I think the Legislature should stand up and do something (like) not fund it or run legislation to reverse it," he said. "It's clearly going to be a financial and health care disaster, so I would encourage the Legislature do something."

Senate Democrats also voiced concern about the proposal.

"Converting Medicaid delivery to managed care is a $2.2 billion endeavor, yet there has been very little input from the Legislature and from the medical community," said Senate Minority Leader Kay Floyd, D-Oklahoma City. "It is especially troubling this process, which is a major change to our state's health care system, is being rushed through as our state's hospitals and medical providers are on the front lines treating Oklahomans with COVID-19."

One the plan's most ardent supporters is state Sen. Kim David, R-Porter, majority floor leader.

"Other states have consistently achieved better health outcomes by managing the health care of their people," she said. "Providing these wrap-around services is a move in the right direction."

David, who controls which Senate legislation gets hearings, said last week that she has no doubt that the measure will be funded.

"As to the few members who are against this, I think a lot of my members, some of those who have been outspoken about it, don't understand exactly what the concept is," she said. "They know what they've been told, and they know they should be afraid, and then I have several who stand to gain by keeping the system the way it is."

Patti Davis, president of the state Hospital Association, said she is "disappointed" with the plan because managed care will do nothing to improve the health of Oklahomans and will increase costs to the state.

"The middle of a public health crisis is not the time to be sending Oklahoma health care dollars to insurance companies to manage the care of Oklahomans," she said.

The state's medical, pediatric and osteopathic associations also issued a joint statement criticizing the plan. The groups said when Oklahoma previously tried managed care, the results were "disastrous" as many doctors - including half of the state's pediatricians - stopped accepting Medicaid patients because of reduced reimbursements and delayed payments. That lack of providers then created an "access-to-care crisis for rural Oklahomans," the group said.

"It is unfortunate that, rather than working with stakeholders and legislators on his managed care scheme, this administration has chosen to push through an ill-conceived plan that will have serious implications for our state's most vulnerable and at-risk populations," said Dr. Woody Jenkins, a Stillwater physician.

The state's Dental Association also opposes the plan. Managed care organizations previously wouldn't allow them to allow perform essential treatments for children because of cost.

"Under Oklahoma's last experience with managed care, it was a disaster and most dentists quit the program, leaving fewer than 100 dentists statewide to serve these children," said Dr. Paul Mullasseril, association president.

But supporters of the plan, including patient advocates, clinicians, community-based organizations, health insurance companies and some health care providers, announced Wednesday that they had formed a coalition advocating for the transition.

Oklahomans for Better Medicaid plans to focus on demonstrating the value of managed care, a group spokeswoman said.

"Continuity of care is extremely important to children in Oklahoma's foster care system, and a managed care system would provide the consistency needed to ensure these children and young adults receive timely health care services," said Natalie Jones, a regional adviser for Youth Villages, a non-profit mental health provider.

Janelle Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites.

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