Oklahoma Health Care Authority board passes rules that that some say could reopen door for managed care

The Oklahoma Health Care Authority’s board voted 4-3 Wednesday to adopt emergency rules that could open the door for the agency to make another attempt at implementing third-party managed care.

Under managed care, the Health Care Authority would outsource care management for most Medicaid recipients to private insurance companies — something Gov. Kevin Stitt has pushed for.

Stitt has faced opposition from some lawmakers and from state health care leaders over managed care.

Health Care Authority CEO Kevin Corbett stressed that passing the rules Wednesday was necessary to keep the agency in compliance with state law, referring to Senate Bill 131, which added legislative oversight to the governor’s plan at the time to overhaul the state’s Medicaid program and implement managed care. It became law in May.

But in June, the Oklahoma Supreme Court ruled that the Health Care Authority didn’t have the authority to implement managed care, creating confusion and differing opinions on the impact of SB 131.

More: Oklahoma Supreme Court strikes down managed care for Medicaid

The author of SB 131 said the Supreme Court’s ruling made the legislation null and void, but some worry the Stitt administration is using the bill, and the agency rules approved Wednesday, as a second chance to implement third-party managed care.

After the Oklahoma Supreme Court ruled that the Health Care Authority didn’t have the authority to implement managed care, the agency “ceased all actions with regard to moving forward on managed care,” Corbett said.

He said the agency, the governor’s office and leadership in the state House and Senate, are discussing a path forward on changes to the state’s Medicaid program.

“At this point in time, we’re in the early stages of this conversation,” Corbett said. “There’s no commitment, there’s no intent to move forward with third-party managed care at this time. It is just one of a number of considerations.”

Representatives from the Oklahoma Dental Association, the Oklahoma Osteopathic Association, the Oklahoma Academy of Family Physicians and the Alliance of Mental Health Providers of Oklahoma each spoke during the meeting to ask the board not to adopt the emergency rules.

SB 131 has been referred to as a “guardrail” law, in that it creates a legislative framework around third-party managed care.

More: Oklahoma Senate approves framework, restrictions for Stitt's Medicaid plan

“There is no need for guardrails if the road — in this case, managed care — is not built,” said Allison LeBoeuf, executive director of the Oklahoma Osteopathic Association. “To continue to implement rules today for this road to nowhere sends a confusing message … at a time when we should all be working together to face ongoing health crises.”

Alex Yaffe, one of three board members who voted against the emergency rules, asked Kevin Corbett, the CEO of the Health Care Authority, to commit that the agency wouldn’t use SB 131 as “legislative authority to pass third-party managed care.”

Corbett said he wouldn’t proceed “with anything that we’re going to do without legislation.”

Tanya Case, who also voted against the rules, said board members had been “marginalized because we have a difference of opinion” on the matter. She asked what the penalty would be if the board didn’t pass the emergency rules in accordance with SB 131.

Corbett said he didn’t know, and didn’t really want to know, “because that would suggest that we’re going to make decisions on the basis of consequences.”

“This is an organization that has significant requirements to comply with lots of laws and regulations,” he said. “It's my directive to everyone that we comply with all laws.”

More: Oklahoma Gov. Kevin Stitt under fire for shake-up on state health board

The Health Care Authority board took up the same emergency rules in August and voted 7-1 to table them.

About a week later, Stitt dismissed two members of the board: Dr. Jean Hausheer, a Lawton ophthalmologist, and Dr. Laura Shamblin, a pediatrician in Oklahoma City. Both had voted to table the emergency rules at the time.

Hausheer and Shamblin were replaced by two new Stitt appointees: Susan Dell’Osso and Gino DeMarco. Dell’Osso is the associate director of a digital marketing company, and DeMarco is a former deputy director of the Oklahoma Tourism and Recreation Department. He also served as the state’s “PPE czar” in the early days of the COVID-19 pandemic.

Both new appointees voted to approve the emergency rules.

In a September interview with The Oklahoman, Stitt defended the dismissals of the board’s only two medical doctors.

He said SB 131 requires the Health Care Authority to institute new rules to stay in compliance with state law.

“All that was required by state law was that the Health Care Authority put these rules in place,” Stitt said. “For us not to do that, we were violating state law. It has nothing to do with managed care."

Stitt said when Corbett let him know that “people on that board weren’t following the laws of the state ... he had a very big problem with that and so do I.”

Reporter Carmen Forman contributed to this report.

This article originally appeared on Oklahoman: New Health Care Authority rules could reopen door for managed care