Supreme Court Strikes Down Medicaid Managed Care

Good news for OSMA members! Late Tuesday, the Oklahoma Supreme Court ruled that the Oklahoma Health Care Authority’s plan to privatize the state Medicaid system and implement Medicaid managed care was unconstitutional.
As you may remember, earlier this year, the OSMA — along with the Oklahoma Dental Association, Oklahoma Osteopathic Association, Oklahoma Society of Anesthesiologists and Oklahoma Chapter of the American Academy of Pediatrics — filed suit to block the Stitt administration’s efforts to issue over $2 billion in contracts to large private insurers to run most of the state Medicaid system under a capitated payment model. The suit argued that the OHCA lacked the authority to enter into such far-reaching contracts for a program that the Legislature had neither approved nor appropriated. In a 6-3 ruling, the Court agreed that the Health Care Authority had overstepped its bounds and that the proposed contracts were invalid.
In a media statement, OSMA president Mary Clarke, MD, said, “We are pleased with the Supreme Court’s ruling and we recognize the heart of this issue is much larger than managed care. 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.”
Even with Tuesday’s ruling, the battle over managed care is not over. In the waning days of session, the Legislature passed SB 131, a so-called “guardrail” bill that will put certain minimum requirements on managed care programs, such as guaranteed minimum reimbursement, regulations on prompt payment, etc. We believe the OHCA, at minimum, will have to issue a new RFP that asks for contracts that can meet these new statutory restrictions.
We are so grateful to our OSMA members, our lobby team and our partners in the lawsuit for helping us get to this point. This is a key victory for protecting the healthcare of Oklahoma’s most at-risk patients.

For more information, please contact OSMA Director of Government Affairs Matt Robison.