Ruling Blocks Okla. MCO Program, But Fight May Not Be Over

In Oklahoma, the most recent state to implement a Medicaid expansion under the Affordable Care Act, the state Supreme Court recently struck down a plan pushed by Republican Gov. Kevin Stitt to implement a managed care organization (MCO) model for the expanded program. Experts say that the decision, which is the result of a suit brought by health care providers, is likely to increase cost in the program and is reminiscent of a similar provider-driven effort to undermine an MCO program in North Carolina.

The Oklahoma Supreme Court’s ruling holds that Stitt was acting outside his authority in soliciting bids for MCO contracts, which were awarded to four insurers — Blue Cross and Blue Shield of Oklahoma, Humana Inc.’s Healthy Horizons, Centene Corp.’s Oklahoma Complete Health, and UnitedHealthcare — and set to start enrolling members on Oct. 1. The court found that the voter-approved initiative expanding Medicaid did not explicitly authorize a managed care system, and said that for such a system to be implemented, the state legislature would have to pass a bill creating a managed care program.

“We find no express grant of legislative authority to create the SoonerSelect program nor do we find the extant statutes implicitly authorize its creation,” Justice Douglas Combs wrote in the opinion. “The purchase of Medicaid benefits would still need to be specifically authorized by law. Once the purchase of health care benefits for Medicaid recipients is specifically authorized by law, then the OHCA [Oklahoma Health Care Authority] has the power and duty to enter into contracts for the delivery of that state purchased health care.”

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