Critic of managed care, Standridge profited from current Medicaid system

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Reese Gorman, The Norman Transcript, Okla.
·4 min read
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Mar. 27—The pharmacies owned by an Oklahoma state senator who has been an outspoken critic of a plan to privatize the state's Medicaid system have received millions of dollars from the existing program.

State Sen. Rob Standridge, R-Norman, owns two pharmacies — Blanchard Drug & Gift and LegendCare Pharmacy — that were reimbursed more than $3.4 million from 2017 to 2020 by the state Medicaid system, according to Oklahoma Health Care Authority data that was obtained through an Open Records Request.

The sum of the annual average pharmacy reimbursements over those four years was over $2.1 million. Blanchard Drug & Gift, located in Blanchard, was reimbursed $1.02 million during that time period, while LegendCare pharmacy, located in Norman, was reimbursed more than $2.38 million.

Standridge's two pharmacies served more Medicaid patients than average, state records showed.

Oklahoma's state-run Medicaid program is one of the state's largest insurers and provides health care and pharmacy access to roughly 938,000 lower-income Oklahomans including pregnant women and children.

The state's Health Care Authority wants to outsource the program to four different insurance companies. It has said the move would improve health outcomes and stabilize costs by providing better coordinated care.

The state's managed care proposal would give cash payments to companies that would cover prescriptions, doctor visits and any other eligible costs.

Critics say the set cash payments would encourage private companies to cover only the most affordable treatments because they get to keep what's left over from their set payment from the state.

The plan has faced bipartisan pushback.

"I do oppose outsourcing Medicaid to massive insurance companies as practically every healthcare professional in the state does, including those managing our biggest hospitals tasked with caring for our most fragile and lower-income families," Standridge said. "I am a pharmacist who owns pharmacies, and because of this I care for Medicaid recipients and the quality of care they receive. I do not think outsourcing Medicaid is the best for these patients."

Richard Briffault, a government ethics expert at Columbia Law School, said that even though Standridge's pharmacies have received millions of dollars from Medicaid, he does not believe his private sector job as a pharmacist poses a conflict of interest when it comes to him publicly opposing managed care as an elected official.

"It's definitely legitimate to point out that he has an interest in the outcome, but I'm not sure most ethicists would call this a conflict of interest," Briffault said.

He compared Standridge's situation to a lawmaker being in favor of a tax cut that would affect them. It's not illegal or unethical to support a tax cut that would benefit a wide group of people that a lawmaker happens to fall into, he said.

"If it was a very tailored tax break that only picked on him or a small number of people, that's a problem," Briffault said. "But, say he's a capitalist and he's cutting the capitalist gains tax and he has a lot of capital gains, he benefits from it but at least he has the argument that there is a broad public benefit."

In fiscal year 2020, the OHCA's total pharmacy costs were about $600 million, making up about 10% of the program's spending, said Kevin Corbett, the CEO of the OHCA.

"We're not anticipating significant cost savings in the initial year, just simply because we have an expanding population joining us and the move is more of a long term move," he said. "But we would think that what really is going to happen is rather than a cost per, per kind of category, or overall, we're thinking that we're going to be able to redistribute the amount that we spend in a more appropriate and efficient way."

The Health Care Authority refused to comment on Standridge's reimbursements.

Pharmacists and other healthcare providers across the state have also been outspoken against the state switching to a managed care program.

"OHCA's current fee for service model allows for innovation, is transparent and is fair to the patient," said Debra Billingsley, the executive director of the Oklahoma Pharmacists Association.

Despite disagreeing with the managed care concept, Standridge said he will still work with the program and provide the best care possible for his customers.

"Certainly some may disagree with me on managed care, but based on what I have studied and observed in surrounding states that have implemented managed care in this way it is neither better for the state nor for our most vulnerable citizens it is intended to help," he said. "However, if it eventually becomes the system in which we deliver Medicaid, I will continue to work to make sure the delivery of care is the best that it can be."

Reese Gorman covers COVID-19, local politics and elections for The Transcript; reach him at rgorman@normantranscript.com or @reeseg_3.