Highlight on Oklahoma: Budget cuts are leaving providers weak

An Oklahoma budget deficit is leading to actual and proposed rate cuts that could have a dramatic impact on patients and providers.  This month, the State Medicaid agency proposed to cut Medicaid (SoonerCare) provider rates by 25 percent, and the State Health Department eliminated state funding for community health centers. Mental health care providers are also hurting under the strained budget with the Oklahoma Department of Mental Health and Substance Abuse Services (ODMHSAS) taking on $13 million in new budget cuts.


The Oklahoma Health Care Authority (OHCA) announced that the 25 percent rate cut could begin impacting providers on June 1, 2016. The rate cuts would impact reimbursement for all 46,000 SoonerCare providers, including hospitals, physicians, durable medical equipment suppliers, nursing facilities and pharmacies. The cuts could have a substantial impact on the 800,000 Oklahomans that are beneficiaries of the program, 524,000 of which are children. Some Medicaid providers in the state have already said the cuts will be so devastating that they will either have to reduce salaries or stop treating SoonerCare patients altogether. Nico Gomez, CEO of the OHCA, said that in addition to the impact of providers that stop accepting SoonerCare, many rural providers might move their businesses to larger communities in order to remain financially stable. Because the program receives federal matching funds, the $64 million rate cut will reduce SoonerCare funding by $164 million in combined state and federal funds.


Oklahoma is currently operating with a physician shortage. Now, with lowered Medicaid reimbursement rates, there are concerns that the state will have an even harder time retaining and recruiting doctors. The cuts also hit community Health Centers. By cutting all state funding for federally qualified health centers (FQHCs), facilities that 175,000 Oklahomans use for primary, dental and mental health care services, the state took away an important source of care for individuals that do not have health insurance. Funding for the community health centers was provided through the uncompensated care fund, but because that fund has been steadily shrinking, the state department of health was forced to pull the funding, which will save the health department about $700,000 for the remainder of the year. Some community health centers, like Variety Care are being forced to reduce hours and the services they offer to stay open. Variety Care CEO, Lou Carmichael, said that the result of the cuts is that individuals without insurance will go to hospitals for primary care.

Mental Health

The $13 million in cuts to mental health is being tacked on to $22.8 million in cuts made since January. Because the state relies on federal matching for many mental health services, the total impact of the cuts will be even higher, almost $40 million. The new cuts are feared to be more impactful than the first round because they more directly impact front-end treatments to help those suffering from mental illness and substance abuse. The cuts include a $7 million reduction in the payments to private mental health and substance abuse facilities, which come a year after those facilities provided $12 million in services that ODMHSAS was unable to pay for. The cuts are also forcing reductions in the number of therapy sessions available to children and adults with mental illnesses and substance abuse disorders. How much strain providers can endure remains to be seen, however, as the cuts keep coming, lawmakers are falling under growing pressure to provide greater funding to the state’s health care programs.

Geographic Markets Selected for Comprehensive Primary Care Initiative

Market selections have been made for certain areas to become some of the first participating payers in the Comprehensive Primary Care (CPC) initiative. On April 11, the CMS Innovation Center announced seven areas from a pool of applicants to represent their selected markets as part of this CPC demonstration, which is a public-private partnership to enhance access to primary care services by establishing medical homes supported by multiple payers.

CMS directed the solicitation for the Comprehensive Primary Care Initiative to public and private health care payers to respond individually to the Innovation Center and the markets were selected in places where there is sufficient interest from a number of payers to support a comprehensive model of primary care. Individual payer applications were collected by CMS to evaluate the degree to which they align with CMS’ approach in the initiative. High scoring payer applications proposing overlapping market areas were aggregated to assess the expected market share of enhanced support for comprehensive primary care. No more than two markets in an HHS region were eligible to participate, and CMS aimed to include at least two markets with significant rural areas.

These markets are multi-payer and may include private health plans, state Medicaid agencies, and employers and include: Arkansas, statewide; Colorado, statewide; New Jersey, statewide; New York, Capital District-Hudson Valley Region; Ohio, Cincinnati-Dayton Region; Oklahoma, Greater Tulsa Region; and Oregon, statewide.

These selected participating payers in each market will be entering into a “Memorandum of Understanding” (MOU) with CMS. Once the participating payers in each market have agreed to the terms and conditions of this MOU, the Innovation Center will then release a solicitation to primary care practices in these geographic areas wishing to participate in providing comprehensive primary care as part of this initiative. The Innovation Center will also invite local practitioner representatives and local patient and consumer representatives to participate in these discussions with Medicare.

The White House has indicated that funding of up to $322 million is available to support 75 practices in seven states beginning this year with plans to serve up to 330,750 Medicare and Medicaid beneficiaries over the course of this four-year initiative. The practices involved will receive a new care management fee on behalf of Medicare fee-for-service beneficiaries to support enhanced primary care services for their patients. The enhanced services will include: improved care coordination; increasing patients’ access to care; delivering preventive care; engaging patients and caregivers in managing their own care, and providing individualized, enhanced care for patients living with multiple chronic diseases and higher needs.

Two models will be tested simultaneously: a service delivery model and a payment model. The service delivery model will test comprehensive primary care, which is characterized as having the following five functions:

  • risk-stratified care management;
  • access and continuity;
  • planned care for chronic conditions and preventative care;
  • patient and caregiver engagement; and
  • coordination of care across the medical neighborhood.

The second type, known as the “payment model” includes a monthly care management fee paid to the selected primary care practices on behalf of their fee-for-service Medicare beneficiaries and, in years 2-4 of the initiative, the potential to share in any savings to the Medicare program. Practices will also receive compensation from other payers participating in the initiative, including private insurance companies and other health plans, which will allow them to integrate multi-payer funding streams to strengthen their capacity to implement practice-wide quality improvement.

The Comprehensive Primary Care Initiative was developed under the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) and the American Recovery and Reinvestment Act of 2009 (Recovery Act), as a multi-payer initiative fostering collaboration between public and private health care payers to strengthen primary care and is one of the ways the Obama Administration has made the recruitment, training and retention of primary care professionals a top priority.

West Virginia Joins States’ Trend of Requiring Autism Coverage, Amends Legislation

West Virginia passed legislation in 2011 that will require insurers, both private and public, to cover applied behavioral analysis which is a treatment for many autism spectrum disorders. However, many flaws have been discovered in the language regarding coverage limits, including age and spending limits, which make execution of the law difficult. Additionally, language had been included in the final draft of the law that was supposed to be removed prior to its passage. The state’s legislation announced on January 23, 2012 that it had initiated a course of action to address the mistakes.

Approximately one in 110 American children is diagnosed with autism, a developmental disorder that prevents a child’s brain from developing normally in areas affecting communication and social skills. While a cure has not been discovered, early intervention treatments have proven to manage the disorder’s symptoms. Many parents contend that the therapeutic needs of their children are not sufficiently met in the public school system, so they are forced to seek treatments outside of school. Such treatments, including applied behavioral analysis, can be expensive, costing some families upwards of $50,000 annually.

The recent trend, adopted by 26 states, including West Virginia, mandate insurers to cover autism treatment. Some other states have passed legislation requiring more restricted coverage of the disorder under mental health parity laws. The only states remaining that have not addressed the issue in some fashion are Oklahoma, Utah and Wyoming. Ron Ashworth, the Board Chair for Sisters of Mercy Health Systems, is an advocate of autism coverage for both social and economic reasons. He states, “…without early treatment, the cost to society is immense–over $100,000 per individual. The cost of insuring for autism is much less than not insuring.” Advocates maintain that coverage will not greatly inflate the cost of insurance premiums, if at all, while it reduces the chance that autistic children will grow to be non-productive adults who are a greater financial burden on taxpayers.

Some disagree, including the Council for Affordable Health Insurance, which estimates that insurance premiums may go up one to three percent by mandating insurers to cover autism spectrum disorder-related treatments. Challengers of the mandate argue that parents of children affected by autism and even their school districts need to assume responsibility for autism treatment and that mandating coverage interferes with the free market. Others contend that many treatments for autism are investigational and experimental, making it inappropriate to require coverage.

While its passage may be controversial, West Virginia Acting Governor, Earl Ray Tomblin, takes pride in the passage of the state’s mandate and recognizes the difficult five year-long lobbying process by parents of autistic children and other advocates. Tomblin stated, “I feel these families’ pain and am happy to be a part of improving their lives…It is my hope that this legislation will bring opportunities for a better life to our children with autism and their families…”