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Oklahoma Medicaid providers could face rates cuts in March

Oklahoma City — Medicaid providers could face a cut again as soon as March, particularly if the nasty flu season continues.

The Oklahoma Health Care Authority faces a budget shortfall in the coming months because of problems with federal and state funds. The authority administers Soonercare, the state's Medicaid program, and there isn't much the board can do to generate substantial savings other than to cut rates, or hope that the Legislature comes up with some extra funding, deputy CEO Garth Splinter said.

“That's seemingly the only two realistic expectations," he said.

Cash flow problems are expected to start in March, said Tasha Black, the authority's budget fiscal planning director told board members at their Thursday meeting. Trouble could start sooner if the authority gets a high volume of medical claims, she said. So far since July, claims have been lower than expected, but that could change because of widespread flu activity.

The state portion of the shortfall is about $9.5 million the Legislature didn't appropriate to make up for revenue the authority lost when the Oklahoma Supreme Court struck down the $1.50-per-pack cigarette tax, Black said. The initial shortfall was about $70 million, but program cuts and special appropriations narrowed the gap.

The bigger problem is about $31.8 million the federal government says was improperly paid and has decided to recoup. The authority received the money and distributed it to the medical schools at University of Oklahoma and Oklahoma State University. The idea was to compensate the schools for services their medical students provide to Medicaid patients and to help ensure a steady supply of new doctors, Splinter said.

The state had submitted paperwork to the Centers for Medicare and Medicaid Services annually without problems, but in 2017, that agency decided the state program hadn't been properly authorized since 2001, Splinter said. The authority has filed an appeal, but if that isn't successful, the federal agency can take the money from Oklahoma's Medicaid payments, leaving a hole in the budget, he said.

The medical schools have a contractual obligation to repay the money, but they likely won't have enough on hand unless the Legislature decides to appropriate extra funds, Splinter said.

“We understand that they don't have the cash either,” he said.

The authority's board had considered provider rate cuts multiple times since summer, but was able to put them off after last-minute cash infusions from the Legislature. At one point, most providers were facing a 9 percent cut, with a 4 percent cut for nursing facilities, some of which said they couldn't operate at that funding level.

The board didn't take up any cost-saving measures at their Thursday meeting, but did vote on some rule changes that had little effect on the budget, including:

• Allowing certain Native American health facilities to get federal reimbursement for mobile health services.

• Making permanent a rule that pays a higher rate for case management for youth transitioning out of psychiatric residential treatment facilities.

• Extending employment services for vocational training to teens with disabilities receiving the Home Supports waiver. Currently, they aren't eligible until 18.

Meg Wingerter

Meg Wingerter has covered health at The Oklahoman since July 2017. Previously, she lived in Topeka, Kansas, and worked at Kansas News Service and The Topeka Capital-Journal, where she earned awards for business coverage. She graduated from... Read more ›