Immediate Release:  February 2, 2016

Sen. Standridge says capitated managed care for Medicaid would be ‘disastrous’ for state

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The chairman of the Senate’s Health and Human Services Committee has filed legislation to put the brakes on implementation of a capitated managed care system for Medicaid in Oklahoma.  Sen. Rob Standridge, R-Norman, said the Oklahoma Health Care Authority has requested proposals creating such a system.  Senate Joint Resolution 56 would require OHCA to end that process, and would require legislative approval before the authority could move forward with a revised plan

“OHCA had legislative approval to request proposals for care coordination models for the aged, blind and disabled citizens who rely on Medicaid.  I think we should be shifting more towards patient-centered medical homes and other provider led solutions which better coordinate care while improving efficiency,” Standridge said.  “Adopting statewide capitated managed care for Medicaid would result in higher costs to taxpayers, reduced access to healthcare, and would result in the closing of hospitals and the loss of good paying jobs in our rural communities.”

Under a capitated managed care system, managed care companies would be paid fees for the statewide administration of the program.  Standridge said Oklahoma’s current Medicaid system is very lean, with just three percent administrative costs, but warned those could jump up to 20 percent under capitated managed care.  He pointed to Florida and what happened after adopting capitated managed care for Medicaid.

“Managed care companies promised the state of Florida five percent savings if they rolled out capitated managed care for Medicaid statewide, but these promised savings were wiped out and Florida was forced to come up with billions of dollars to keep the managed care companies profitable,” Standridge said.  “If proponents had been successful in getting Oklahoma to join Florida in adopting this plan two years ago as they wanted, it would have cost Oklahoma over $600 million more.  Add in the additional $400 million we’ve cut Medicaid during that time and we could multiply our current $1 billion deficit by two.  Imagine what that would do to our schools, public safety and other core services if that had happened.  That’s exactly what we’d be looking at today.”

Standridge said Texas also adopted capitated managed care for Medicaid and the result has been fewer healthcare providers and higher costs to the state.  “Not even a fourth of doctors in Texas will take on new Medicaid patients.  Managed care companies are extracting their profits from physician examining rooms.  Texas isn’t saving money—the financial reality is that Medicaid is costing Texas taxpayers much more than in Oklahoma,” Standridge said.  “If Oklahoma paid the same amount per participant as Texas, it would cost Oklahoma taxpayers over $1 billion more.  Hospitals are closing in rural areas, leaving Texans without access to that level of care, and depriving communities of hundreds of jobs.  SJR 56 would prevent that from happening in Oklahoma.”

Standridge said the measure would require OHCA to rework their proposal but would also mandate legislative approval before it could be implemented.

“I agree there needs to be greater efficiency in the use of resources.  Patient-centered medical homes  and other provider-led solutions can accomplish this by better coordinating services on behalf of patients.  But adopting a Florida or Texas-style capitated managed care system for Medicaid will result in fewer providers serving those patients,” Standridge said.  “Costs would go up, jobs would be lost, and our state’s overall health would only get worse.  As a medical professional and a legislator, I firmly believe capitated managed care would be disastrous for Oklahoma.”

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