The state’s Medicaid agency is exploring whether it will cut provider rates and other services if the agency does not receive the budget it requested from the state Legislature for the coming fiscal year.
Leaders of the Oklahoma Health Care Authority discussed at Thursday’s meeting a range of options it might have to take, including decreasing services and cutting provider rates, if the Oklahoma Legislature does not fully fund its budget request.
“What makes this a very difficult conversation is — there’s a lot of options and a lot of work still left to be done,” authority CEO Nico Gomez said. “So there’s still some level of detail that needs to be processed as we go through and ask, ‘Are there unintended consequences to our actions that we aren’t considering?’”
If the Oklahoma Health Care Authority receives the same budget it did last year, it might have to cut provider rates between about 6 percent and 7 percent, decreasing the amount of money that it reimburses medical professionals for the health care services they provide to some of Oklahoma’s poorest residents.
If the agency receives a 5 percent budget reduction, it might cut provider rates between 12 percent and about 14 percent. Gov. Mary Fallin said in her State of the State address that some state agencies could see up to a 5 percent cut.
The Oklahoma Health Care Authority administers SoonerCare, the state’s Medicaid program that provides health care services to low-income children and some adults. About 850,420 Oklahomans, the majority of them children, are enrolled in SoonerCare.
Even if the Oklahoma Legislature approves the same amount of money as last year for the state’s Medicaid agency budget, the agency still may have to cut the amount of money it pays doctors and other medical professionals to provide care to some of Oklahoma’s poorest residents.
The Oklahoma Health Care Authority has requested about $1 billion from the state Legislature for its 2015 fiscal year budget. That includes a request for an additional $90 million.
Part of the $90 million the agency is requesting is to make up for a loss in federal funding. The agency will lose $50 million in the money that the federal government provides the state to administer Medicaid.
Because Oklahoma’s economy improved, the state receives less money for Medicaid, Gomez said. The agency also is requesting an additional $40 million to cover the growth in the program.
“When the economy does better, the demand is supposed to go down, but unfortunately, it’s not in this case,” Gomez said. “Because we still have a number of people who still financially qualify, that’s adding to the stress of the safety net.”
Gomez said he did not include in the agency’s request money to make up for a loss in funding from tobacco tax revenue.
The agency projects that it will lose about $14 million in tobacco tax revenue. Gomez said it’s potentially good news, in that fewer people are buying cigarettes, but it does affect the agency’s budget. That loss is not reflected in the agency’s budget request.
Along with potentially cutting provider rates, the health care authority has looked at a number of other areas where the agency and state could save money.
For example, the agency has looked at whether it will require prior authorization on all prescriptions for controlled dangerous substances, such as prescription painkillers and drugs used to treat children and adults with ADHD.
The agency has some prior authorizations, but this change would require more prescriptions to have prior authorization — and that change could potentially save the state $3 million,.
Gomez said it’s an issue that needs further study to determine what the consequences could be.
“It’s not that we don’t want people to get controlled substances,” he said. “We want to make sure the right patient is getting the right drug at the right time, and it is such an important issue for the state, and it’s an issue that’s very important, No. 1 to the health and well being of our members.”