An Act
ENROLLED SENATE
BILL NO. 1337 By: McCortney, Rosino, Haste,
and Garvin of the Senate
and
McEntire, Randleman, and
Sims of the House
An Act relating to the state Medicaid program;
providing legislative intent; amending 56 O.S. 2021,
Section 4002.2, which relates to definitions used in
the Ensuring Access to Medicaid Act ; modifying,
adding, and eliminating certain definitions;
requiring the Oklahoma Health Care Authority to enter
into certain contracts; re quiring legislative
authorization for certain contracts; requiring the
Authority to issue requests for proposals to cover
specified Medicaid populations; requiring
specification of services covered and not covered;
requiring program implementation by specified date
subject to certain condition; requiring certain
coordination of services; requiring certain federal
approval prior to program imp lementation; requiring
certain bids; allowing certain entities to be awarded
contracts; specifying number of contract s to be
awarded; requiring selection of provider -led entity
for statewide coverage except under specified
condition; requiring the Authority to develop certain
preferential scoring methodology; providing factors
for developed methodology; authorizing selection of
provider-led entity for urban region under certain
conditions; allowing extension of contracts in
certain situations; requiring new contracts to be
made after the end of the contract term; authorizing
certain delay in contract implementation; requiring
the Authority to develop process for assignment of
members to contracted entities ; stipulating
requirements for American Indians and Alaska Natives;
ENR. S. B. NO. 1337 Page 2
stipulating procedures for continuity of member care
management in event of contract termination; granting
certain right to Medicaid members; requiring
contracted entity to provide certain noti fication;
directing assignment of members to primary care
provider under certain conditio n; requiring
development of certain assignment process; amending
56 O.S. 2021, Section 4002.4, which relates to
network adequacy standards; requiring time and
distance standards; removing certain requireme nts;
modifying terminology; increasing contracting
requirements for certain providers; requiring certain
expansion of provider-led entity coverage area;
requiring approval of the Authority; requiring the
Authority to develop certain contract ter ms;
requiring contracted entities to meet all
requirements; requiring the Authority to develop
certain methods and processes; amending 56 O.S. 2021,
Section 4002.5, which relates to duties of contracted
entities; making contracted entity responsible for
all administrative func tions for enrolled members ;
requiring contracted entity to hold certificate of
authority as health maintenance organi zation;
requiring contracted entity to have certain shared
governance structure consisting of specified members;
modifying terminology; providing certain
construction; prohibiting certain contracting
practices by contracted entity; requiring the use of
certain drug formulary; ensuring broad access to
pharmacies; requiring submission of data through
state-designated entity for health informati on
exchange; amending 56 O.S. 2021, Secti on 4002.6,
which relates to determination and review
requirements; mandating compliance by contracted
entity with prior authorization requirements;
requiring the Authority to establish certain
requirements; modifyin g terminology; modifying peer -
to-peer review procedures; directing establishment of
internal and external review and appeal requirements;
directing the Authority to establish requirements for
internal and external reviews; amending 56 O.S. 2021,
Section 4002.7, which relates to requirements for
ENR. S. B. NO. 1337 Page 3
processing and adjudicating claims ; directing the
Authority to establish cert ain requirements;
modifying terms; amending 56 O.S. 2021, Section
4002.8, which relates to uniform procedures for
review and appeal for adverse determinations;
modifying terms; amending 56 O.S. 2021, Section
4002.10, which relates to re adiness review; modifying
terms; removing certain requirements; amending 56
O.S. 2021, Section 4002.11, which relates to
scorecard comparing contracted entiti es and dental
benefit managers; limiting certain reporting
criteria; modifying scoring time period; modifying
terms; amending 56 O.S. 2021, Section 4002 .12, which
relates to reimbursement of providers ; imposing
termination date on minimum r eimbursement rates;
modifying terms; modifying value-based payment
criteria; setting certain requirements for certain
services and providers; directing establishment of
incentive payment for c ertain providers; requiring
the Authority to specify time frame for attainment o f
certain percentage of value -based contracts;
requiring capitation rates to be updated annually,
actuarily sound, and risk-adjusted; authorizing the
Authority to establish symmetric risk corridor;
directing the Authority to establish process for
recovery of certain funds; requiring certain
determination and monitoring by the Authority;
requiring contracted entity to meet certain primary
care spending level; requiring dental benefit manager
to maintain certain advisory committee; exempting
dental providers from mandatory capitated contracts
with dental benefit managers; requiring the Authority
to ensure sustainability of transformed Medicaid
delivery system; requiring the Authority to develop
plan to preserve or increase supplemental payments;
directing the Authority to preserve and expand levels
of funding through directed payments subject to
certain conditions; requiring the Authority to submit
certain reports to specified individuals and
entities; stipulating criteria of reports; amending
56 O.S. 2021, Section 4002.13, which relates to the
Quality Advisory Committee; renaming committee;
ENR. S. B. NO. 1337 Page 4
modifying terms; requiring transformed Medicaid
delivery system to include uniform defined measures
and goals; requiring contracted entities to use
established quality metrics; allowing use of
additional quality met rics subject to certain
agreement; requiring the Authority to develop
processes for determining quality metrics;
authorizing the Authority to use consultants,
organizations, or third -party measures to de velop
outcome measures; subjecting quality metrics to
accountability measures and penalties; amending 56
O.S. 2021, Section 4004, which relates to federal
approval; directing the Authority to take certain
action to seek federal approval ; requiring obtainment
of certain federal approval prior to implementation
of certain contracts; amending 63 O.S. 2021, Section
5009, which relates to the Oklahoma Medicaid program;
removing obsolete provisions relating to conversion
of delivery system; amending 36 O.S. 2021, Section
624, which relates to insurance premium tax;
directing certain proceeds to specified fund;
providing certain constructio n; creating Medicaid
Health Improvement Revolving Fund; specifying funding
sources; stating allowed expenses; stipu lating
process for expenditures; renumbering 56 O.S. 2021,
Section 4004, as amended by Section 20 of this act;
repealing 56 O.S. 2021, Sections 1010.2, 1010.3,
1010.4, 1010.5, and 1010.8, which relate to the
Oklahoma Medicaid Program Reform Act of 2003 ;
repealing 56 O.S. 2021, Sections 4002.3 and 4002.9,
which relate to the Ensuring Access to Medicaid Act ;
repealing 63 O.S. 2021, Sections 5009.5, 5011, and
5028, which relate to the Oklahoma Health Care
Authority Act; providing for codification; providing
a conditional effective date; providing an effective
date; and declaring an emergency.
SUBJECT: Medicaid
ENR. S. B. NO. 1337 Page 5
BE IT ENACTED BY THE PEOP LE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codif ied
in the Oklahoma Statutes as Section 4002.1a of Title 56, unless
there is created a dupli cation in numbering, reads as follows:
It is the intent of the Le gislature to transform the state's
current Medicaid program to provide budget predictability for th e
taxpayers of this st ate while ensuring quality care to those in
need. The state Medicaid program shall be designed to achieve the
following goals:
1. Improve health outcomes for Me dicaid members and the state
as a whole;
2. Ensure budget predictabilit y through shared risk and
accountability;
3. Ensure access to care, quality measures, and m ember
satisfaction;
4. Ensure efficient and cost -effective administrative systems
and structures; and
5. Ensure a sustainable delivery system that is a provider -led
effort and that is operated and managed by providers to the maximum
extent possible.
SECTION 2. AMENDATORY 56 O.S. 2021, Sec tion 4002.2, is
amended to read as follows:
Section 4002.2. As used in this act the Ensuring Access to
Medicaid Act:
1. "Adverse determination" has the same meaning as provided by
Section 6475.3 of Title 36 of the Oklahoma Statutes;
2. "Accountable care organization" means a network of
physicians, hospitals, and other health care providers that provides
coordinated care to Medic aid members;
ENR. S. B. NO. 1337 Page 6
3. "Claims denial error rate" means the rate of claims denials
that are overturned on appeal;
3. 4. "Capitated contract" means a contract between the
Oklahoma Health Care Authority and a contracted entity for delivery
of services to Medicai d members in which the Authority pays a fixed,
per-member-per-month rate based on actuarial calculations;
5. "Children's Specialty Plan" means a health care plan that
covers all Medicaid services other than den tal services and is
designed to provide care to:
a. children in foster care,
b. former foster care children up to twenty-five (25)
years of age,
c. juvenile justice involved children, and
d. children receiving adoption assistance;
6. "Clean claim" means a properly completed billing form with
Current Procedural Terminology, 4th Edition or a more recent
edition, the Tenth Revision of the International Classification of
Diseases coding or a more recent revision , or Healthcare Common
Procedure Coding Syste m coding where applicable that contains
information specifically required in the Provider Billing and
Procedure Manual of the Oklahoma Health Care Authority, as defined
in 42 C.F.R., Section 447.45 (b);
4. 7. "Commercial plan" means an organization or entity that
undertakes to provide or arrange for the delivery of health care
services to Medicaid members on a prepaid basi s and is subject to
all applicable federal a nd state laws and regulations;
8. "Contracted entity" means an organization or entity that
enters into or will ente r into a capitated contract with the
Oklahoma Health Care Authority for the delivery of services
specified in this act that will assume fina ncial risk, operational
accountability, and statewide or regional functionality as defined
in this act in managing c omprehensive health outcomes of Medicaid
members. For purposes of this act, the term contracted entity
ENR. S. B. NO. 1337 Page 7
includes an accountable care organiza tion, a provider-led entity, a
commercial plan, a dental benefit manager, or any other entity as
determined by the Authority;
9. "Dental benefit manager" means an entity under contract with
the Oklahoma Health Care Authority to manage and deliver denta l
benefits and services to enrollees of the capitated managed care
delivery model of the state Medicaid program that handles claims
payment and prior authorizations and coordinates dental care with
participating providers and Medicaid members;
5. 10. "Essential community provider " has the same meaning as
provided by means:
a. a Federally Qualified Health Center,
b. a community mental health center,
c. an Indian Health Care Provider,
d. a rural health clinic,
e. a state-operated mental health hospital,
f. a long-term care hospital serving children (LTCH -C),
g. a teaching hospital owned, jointly owned, or
affiliated with and designated by the University
Hospitals Authority, University Hospitals Trust,
Oklahoma State University Medical Authority, or
Oklahoma State University Medical Trust,
h. a provider employed by or contracted with, or
otherwise a member of the f aculty practice plan of:
(1) a public, accredited medical school in this
state, or
(2) a hospital or health care entity directly or
indirectly owned or operated by the University
Hospitals Trust or the Oklahoma State University
Medical Trust,
ENR. S. B. NO. 1337 Page 8
i. a county department of health or city-county health
department,
j. a comprehensive community addiction recovery center,
k. a hospital licensed by the State of Oklahoma including
all hospitals participatin g in the Supplemental
Hospital Offset Payment Program ,
l. a Certified Community Behavioral Health Clinic
(CCBHC),
m. a provider employed by or contracted with a primary
care residency program accred ited by the Accreditation
Council for Graduate Medica l Education,
n. any additional Medicaid provider as approved by the
Authority if the provider either offe rs services that
are not available from any other provider within a
reasonable access standard or provides a substantial
share of the total units of a particular service
utilized by Medicaid members within the region during
the last three (3) years, and the combined capacity of
other service providers in the region is insufficient
to meet the total needs of the Medicaid mem bers, or
o. any provider not otherwise mentioned in this p aragraph
that meets the defini tion of "essential community
provider" under 45 C.F.R., Section 156.235;
6. "Managed care organization" means a health plan under
contract with the Oklahoma Health Care Authority to participate in
and deliver benefits and ser vices to enrollees of the capi tated
managed care delivery model of the state Medicaid program ;
7. 11. "Material change" includes, but is not limited to, any
change in overall business operations such as policy, process or
protocol which affects, or can re asonably be expected to affect ,
more than five percent (5%) of enrolle es or participating pro viders
of the managed care organization or dental bene fit manager
contracted entity;
ENR. S. B. NO. 1337 Page 9
8. 12. "Governing body" means a group of individuals appointed
by the contracted entity who approve policies, operations,
profit/loss ratios, executive employment decisio ns, and who have
overall responsibility for the operations of the contracted entity
of which they are appointed;
13. "Local Oklahoma provider organization" means any state
provider association, accountable care organization, Certified
Community Behavioral Health Clinic, Federally Qualified Health
Center, Native American tribe or tribal association, hospital or
health system, academ ic medical institution, currently practicing
licensed provider, or other local Oklahoma provider organization as
approved by the Authority;
14. "Medical necessity" has the same meaning as provided by
rules of promulgated by the Oklahoma Health Care Author ity Board;
9. 15. "Participating provider" means a provider who has a
contract with or is employed by a managed care organization or
dental benefit manager contracted entity to provide services to
enrollees under the capitated managed care delivery model of the
state Medicaid program Medicaid members as authorized by this act ;
and
10. 16. "Provider" means a health care or dental provider
licensed or certified in this state or a provider that meets the
Authority's provider enrollment criteria to contract with the
Authority as a SoonerCare provider;
17. "Provider-led entity" means an organization or entity that
meets the criteria of at least one of following two subparagraphs:
a. a majority of the entity's ownership is held by
Medicaid providers in this state or is held by an
entity that directly or indirectly owns or is unde r
common ownership with Medicaid providers in thi s
state, or
b. a majority of the entity's governing body is composed
of individuals who:
ENR. S. B. NO. 1337 Page 10
(1) have experience serving Medicaid members and:
(a) are licensed in this state as physicians,
physician assistants, nurse practitioners,
certified nurse-midwives, or certified
registered nurse anesthetists,
(b) at least one board member is a licensed
behavioral health provider , or
(c) are employed by:
i. a hospital or other medical faci lity
licensed by this state and operating in
this state, or
ii. an inpatient or outpatient mental
health or substance abuse treatment
facility or program licensed or
certified by this stat e and operating
in this state,
(2) represent the providers or facili ties described
in division (1) of this subparagraph including ,
but not limited to, individuals who are employed
by a statewide provider association, or
(3) are nonclinical administrators of cl inical
practices serving Medicaid members;
18. "Statewide" means all counties of this state inclu ding the
urban region; and
19. "Urban region" means:
a. all counties of this state with a county population of
not less than five hundred thousand (500,000)
according to the latest Federal Decennial Census, and
b. all counties that are contiguous to the counties
described in subparagraph a of this paragraph ,
ENR. S. B. NO. 1337 Page 11
combined into one region.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statute s as Section 4002.3a of Title 56, unless
there is created a duplication in numbering, reads as follows:
A. 1. The Oklahoma Health Care Authority (OHCA) shall enter
into capitated contracts with contracted entities for the delivery
of Medicaid services as specified in this act to transform the
delivery system of the state Medicaid program for t he Medicaid
populations listed i n this section.
2. Unless expressly authorized b y the Legislature, the
Authority shall not issue any request for proposals or enter into
any contract to transform the delivery system for the aged, blind,
and disabled populations eligible for Sooner Care.
B. 1. The Oklahoma Health Care Authority shall issue a request
for proposals to enter into public-private partnerships with
contracted entities other than dental benefit manage rs to cover all
Medicaid services other than dental services for the followi ng
Medicaid populations:
a. pregnant women,
b. children,
c. deemed newborns under 42 C.F.R., Section 435.117 ,
d. parents and caretaker relatives, and
e. the expansion population.
2. The Authority shall specify th e services to be covered in
the request for proposals referenced in paragraph 1 of this
subsection. Capitated contracts referenced in this subsection sh all
cover all Medicaid services other than dental services including:
a. physical health services inclu ding, but not limited
to:
(1) primary care,
ENR. S. B. NO. 1337 Page 12
(2) inpatient and outpatient services, and
(3) emergency room services,
b. behavioral health services, and
c. prescription drug services.
3. The Authority shall specif y the services not covered in the
request for proposals referenced in paragraph 1 of this subsection.
4. Subject to the requirements and approval of the Centers for
Medicare and Medicaid S ervices, the implementation of the program
shall be no later than October 1, 2023.
C. 1. The Authority shall issue a request for proposals to
enter into public-private partnerships with dental benefit managers
to cover dental services for the foll owing Medicaid populations:
a. pregnant women,
b. children,
c. parents and caretaker relatives,
d. the expansion populat ion, and
e. members of the Childr en's Specialty Plan as provided
by subsection D of this section.
2. The Authority shall specify the se rvices to be covered in
the request for proposals referenced in paragraph 1 of t his
subsection.
3. Subject to the requirements and approval of the Centers for
Medicare and Medicaid Services, the implementation of the program
shall be no later than October 1, 2023.
D. 1. Either as part of the request for proposals referenced
in subsection B of this section or as a separate request for
proposals, the Authority shall issue a request for proposals to
ENR. S. B. NO. 1337 Page 13
enter into public-private partnerships with one contracted entity to
administer a Children 's Specialty Plan.
2. The Authority shall specify the ser vices to be covered in
the request for proposals referenced in paragraph 1 of th is
subsection.
3. The contracted entity for the Childr en's Specialty Plan
shall coordinate with the dental benefit managers who cover dental
services for its members as provid ed by subsection C of this
section.
4. Subject to the requirements and approval of the Centers for
Medicare and Medicaid Services, the implementation of the program
shall be no later than October 1, 2023.
E. The Authority shall not implement the transfo rmation of the
Medicaid delivery system until it recei ves written confirmation from
the Centers for Medicare and Medicaid Services that a managed care
directed payment prog ram utilizing average commercial rate
methodology for hospita l services under the Supplementa l Hospital
Offset Payment Program has been approved for Year 1 of the
transformation and will be included in the budget neutrality cap
baseline spending level for purposes of Oklahoma's 1115 waiver
renewal; provided, however, nothing in this section shall prohib it
the Authority from exploring alternative opportunities with the
Centers for Medicare and Medicaid Services to maximize the average
commercial rate benefit.
SECTION 4. NEW LAW A new sec tion of law to be codified
in the Oklahoma Statutes as Sectio n 4002.3b of Title 56, unless
there is created a du plication in numbering, reads as follows:
A. All capitated contracts shall be the result of requests for
proposals issued by the Oklahoma Healt h Care Authority and
submission of competitive bids by contra cted entities pursuant to
the Oklahoma Central Purc hasing Act.
B. Statewide capitated contracts may be awarded to any
contracted entity including, but not limited to, a provider-led
entity.
ENR. S. B. NO. 1337 Page 14
C. The Authority shall award no less than three statewide
capitated contracts to provide comprehensive integrated h ealth
services including, but not limited to, medical, behavioral health,
and pharmacy services and no less than two statewide capitated
contracts to provide dental coverage to Medicaid members as
specified in Section 3 of this act.
D. 1. Except as specified in paragraph 2 of this subsection,
at least one capitated contract to provide statewide coverage to
Medicaid members shall be awarded to a provider -led entity, as long
as the provider-led entity submits a responsive reply to the
Authority's request for proposals demonstrating ability to fulfill
the contract requirements.
2. If no provider-led entity submits a responsive reply to the
Authority's request for proposals demonstrating ability to fulfill
the contract requirements, the Authority shall not be required to
contract for statewide coverage with a provider-led entity.
3. The Authority shall develop a scoring methodology for the
request for proposals that affords preferential scoring to provider -
led entities, as long as the provider-led entity otherwise
demonstrates ability to fulfill the contract requirements. The
preferential scoring methodology shall include opportunities to
award additional points to provider-led entities based on certain
factors including, but not limited to:
a. broad provider participation in ownership and
governance structure,
b. demonstrated experience in care coordination and care
management for Medicaid members acros s a variety of
service types including , but not limited to, primary
care and behavioral health,
c. demonstrated experience in Medicare or Medicaid
accountable care organizations or other Medicare or
Medicaid alternative payment models, Medicare or
Medicaid value-based payment arrangements, or Medicare
or Medicaid risk-sharing arrangements including, but
not limited to, innovation models of the Center for
Medicare and Medicaid Innovation of the Centers for
ENR. S. B. NO. 1337 Page 15
Medicare and Medicaid Services, o r value-based payment
arrangements or risk-sharing arrangements in the
commercial health care market, and
d. other relevant factors identified by the Authority.
E. The Authority may select at least one provider-led entity
for the urban region if:
1. The provider-led entity submits a responsive reply to the
Authority's request for proposals demonstrating ability to fulfill
the contract requirements; and
2. The provider-led entity demonstrates the ability, and agrees
continually, to expand its coverage area throughout the contract
term and to develop statewide op erational readiness within a time
frame set by the Authority but not mandated before five (5) years.
F. At the discretion of the Authority, capitated contracts may
be extended to ensure there are no gaps in coverage that may r esult
from termination of a capitated contract; provided, the total
contracting period for a capitated contract shall not exceed seven
(7) years.
G. At the end of the contracting period, the Authority shall
solicit and award new contracts as provided by this section and
Section 3 of this act.
H. At the discretion of the Authority, subject to appropriate
notice to the Legislature and the Ce nters for Medicare and Medicaid
Services, the Authority may approve a delay in the implementation of
one or more capitated contracts to ensure financia l and operational
readiness.
SECTION 5. NEW LAW A new section of law to be codifi ed
in the Oklahoma Statutes as Section 4002.3c of Title 56, unless
there is created a duplication in numbering, reads as follows:
A. The Authority shall develop and implement a process for
assignment of Medicaid members to contracted entities.
ENR. S. B. NO. 1337 Page 16
B. The Authority may onl y utilize an opt-in enrollment process
for the voluntary enrollment of American Indians and Alaska Natives.
Notwithstanding any other provision of thi s act, the Authority shall
comply with all Indian p rovisions associated with Medicaid managed
care including, but not limited to, the Social Security Act ,
1932(a)(2)(C), the Ameri can Recovery and Reinvestment Act of 2009,
P.L. 111-5 (Feb. 17, 2009), Secti on 5006, the Children's Health
Insurance Program Re authorization Act of 2009, P.L. 111-3 (Feb. 4,
2009), and the Centers for Medicare and Medicaid Services (CMS)
managed care protections, 25 C.F.R., 438.14.
C. In the event of the termination of a capita ted contract with
a contracted entity during the contract duration, the Authority
shall reassign members to a remaining contracted entity with
demonstrated performance and capability. If no remaining contracted
entity is able to assume management for such members, the Authority
may select another contracted entity by application, as specified in
rules promulgated by the Oklahoma Health Care Authority Board, if
the financial, operation , and performance requirements can be met,
at the discretion of the Autho rity.
SECTION 6. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 4002.3d of Title 56, unless
there is created a duplication in numbering, reads as follows:
A. Every Medicaid member enrolled in a contracted entity shall
have the right to select his or her primary care provider and to
change his or her prima ry care provider at any time , as long as the
selected primary care provider is a participating provider . Any
parent or guardian of a Medicaid member who is a minor child
enrolled in a contracted en tity shall have the right to select the
primary care provider for the member's minor child and to change the
primary care provider at any time , as long as the selected primary
care provider is a participating provider.
B. If a member, or parent or guardian of a member who is a
minor child, does not select a primary care provider, the contracted
entity shall notify the member, parent, or guardian that he or she
needs to select a primary care provider and shall send the member,
parent, or guardian the name, contact information, employer, and any
other applicable information as determined by the Oklahoma Health
Care Authority of the three primary care providers nearest to the
ENR. S. B. NO. 1337 Page 17
member's home address that are contracted with the contracted
entity.
C. 1. If, after the contracted entity sends the information
described in subsection B of this section, the member, parent, or
guardian does not select a primary care provider within a time
determined by the Authority, t he contracted entity shall assign the
member to a primary care provider in accordance with the process
described in paragraph 2 of this subsection.
2. The Authority shall develop and implement a process for the
assignment by contracted entiti es of Medicaid members who do not
select a primary care provi der to a primary care provider. The
process shall prioritiz e existing patient-provider relationships and
geographic proximity of the patient to the provider, and shall
assign families to the same primary care provider to the extent
possible.
SECTION 7. AMENDATORY 56 O.S. 2021, Section 4002.4, is
amended to read as follows:
Section 4002.4. A. The Oklahoma Health Ca re Authority shall
develop network adequacy standards for all managed care
organizations and dental benefit managers contracted entities that,
at a minimum, meet the requirements of 42 C.F.R., Sections 438.14
438.3 and 438.68. Network adequacy standards established under this
subsection shall include distance and time standards and shall be
designed to ensure enrollees members covered by the managed care
organizations and dental benefit managers contracted entities who
reside in health professional shortage areas (HPSAs) designated
under Section 332(a)(1) of the Public Health Service Act (42 U.S.C.,
Section 254e(a)(1)) have access to in-person health care and
telehealth services wi th providers, especially adult and pediatric
primary care practitioners.
B. All managed care organizations and d ental benefit managers
shall meet or exceed network adequacy standards established by the
Authority under subsection A of this section to ensur e sufficient
access to providers for enrollees o f the state Medicaid program.
C. All managed care organizations and dental benefit managers
shall contract to the extent possible and practicable The Authority
ENR. S. B. NO. 1337 Page 18
shall require all contracted entities to offer or extend contracts
with all essential community providers, all providers who receive
directed payments in accord ance with 42 C.F.R., Part 438 and suc h
other providers as the Authority may specify. The Authority shall
establish such requirements as may be necessary to prohibit
contracted entities from excluding essential community providers,
providers who receive di rected payments in accordance with 42
C.F.R., Part 438 and suc h other providers as the Authority may
specify from contracts with contracted entities.
D. C. To ensure models of care are devel oped to meet the needs
of Medicaid members, each contracted entit y must contract with at
least one local Oklahoma provider organization for a model of care
containing care coordination, care management, utilization
management, disease management, network management, or another model
of care as approved by the Authority. Such contractual arrangements
must be in place within twelve (12) months of the effective date of
the contracts awarded pursuant to the requests for proposals
authorized by Section 3 of this act.
D. All managed care organizations and dental be nefit managers
contracted entities shall formally credential and recredential
network providers at a frequency required by a single, consolidated
provider enrollment and credentialing process established by the
Authority in accordance with 42 C.F.R., Secti on 438.214.
E. All managed care organizations and dental benefit managers
contracted entities shall be accredited in accordance with 45
C.F.R., Section 156.275 by an accrediting entity recognized by the
United States Department of Health and Human Serv ices.
F. 1. If the Authority awards a capitated contract t o a
provider-led entity for the urban region under Section 4 of this
act, the provider-led entity shall expand its coverage area to every
county of this state within the time frame set by the Authority
under subsection E of Section 4 of this act .
2. The expansion of the provider-led entity's coverage area
beyond the urban region shall be subject to the approval of the
Authority. The Authority shall approve e xpansion to counties for
which the provider-led entity can demons trate evidence of network
adequacy as required un der 42 C.F.R., Sections 438.3 and 438.68.
ENR. S. B. NO. 1337 Page 19
When approved, the additional county or counties shall be added to
the provider-led entity's region during the next open enrollment
period.
SECTION 8. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 4002.4a of Title 56, unless
there is created a duplication in numbering, reads as follows:
A. 1. The Oklahoma Health Care Authority shall develop
standard contract terms for contracted entities to include, but not
be limited to, all requirements stipulated by this act. The
Authority shall oversee and monitor performance of contracted
entities and shall enforce the terms of capitated contracts as
required by paragraph 2 of this subsection.
2. The Authority shall require each con tracted entity to meet
all contractual and operational requirements as defined in the
requests for proposals issued pursuant to Section 3 of this act.
Such requirements shall i nclude but not be limited to reimbursement
and capitation rates, insurance rese rve requirements as specified by
the Insurance Department, acceptance of risk as defined by the
Authority, operational performance expectations including the
assessment of penalties, member marketing guidelines, other
applicable state and federal regulator y requirements, and all
requirements of this act including, but not limited to, the
requirements stipulated in this section.
B. The Authority shall develop methods to ensure pr ogram
integrity against provider fraud, waste, and abuse.
C. The Authority shall develop processes for providers and
Medicaid members to report violations by contracted entities of
applicable administrative rules, state laws, or federal laws.
SECTION 9. AMENDATORY 56 O.S. 2021, Section 4002.5, is
amended to read as follows:
Section 4002.5. A. A contracted entity shall be responsible
for all administrative functions for members enrolled in its plan
including, but not limited to, claims processing, authorization of
health services, care and case management , grievances and appeals,
and other necessary administrati ve services.
ENR. S. B. NO. 1337 Page 20
B. A contracted entity selected by the Oklahoma Health Care
Authority under Section 4 of this act shall obtain a certificate of
authority as a health ma intenance organization issued by the
Insurance Department prior to the execution of the contract between
the contracted entity and the Authority.
C. 1. To ensure providers have a voice in the direction and
operation of the contracted entities selected by the Oklahoma Health
Care Authority under Section 4 of this act, each contracted entity
shall have a shared governance structure that includes:
a. representatives of l ocal Oklahoma provider
organizations who are Medicaid providers,
b. essential community providers , and
c. a representative from a teaching hospital owned,
jointly owned, or aff iliated with and designated by
the University Hospitals Authority, University
Hospitals Trust, Oklahoma State University Medical
Authority, or Oklahoma State University Medical Trust.
2. No less than one-third (1/3) of the contracted entity's
local governing body shall be comprised of representatives of local
Oklahoma provider organizations.
3. No less than two members of the contracted entity's clinical
and quality committees shall be representatives of local Oklahoma
provider organizations, and the commit tees shall be chaired or co-
chaired by a representative of a local Oklahoma provider
organization.
D. A managed care organization or dental benefit manager
contracted entity shall promptly notify the Authority of all changes
materially material changes affecting the delivery of care or the
administration of its program.
B. E. A managed care organization or dental benefit manager
contracted entity shall have a medical loss ratio that meets the
standards provided by 42 C.F.R., Section 438.8.
ENR. S. B. NO. 1337 Page 21
C. F. A managed care organization or dental benefit manager
contracted entity shall provide patient data to a provider upon
request to the extent al lowed under federal or state laws, rules or
regulations including, but not limited to, the Health Insurance
Portability and Accountability Act of 1996.
D. G. A managed care organization or dental benefit manager
contracted entity or a subcontractor of such managed care
organization or dental benefit man ager a contracted entity shall not
enforce a policy or contract term with a provider that requires the
provider to contract for all products that are currently offered or
that may be offered in the future by the managed care organization
or dental benefit manager contracted entity or subcontractor.
E. H. Nothing in this act or in a contract between the
Authority and a managed care organization or dental benefit manager
contracted entity shall prohibit the managed care organization or
dental benefit manager contracted entity from contracting with a
statewide or regional accounta ble care organization to implement the
capitated managed care delivery model of the state Medicaid program .
I. Nothing in this act, in a contract between the Authority and
a contracted entity, or in a contract between a contracted entity
and a provider shall prohibit any provider from contracting with
more than one contracted entity.
J. A contracted entity shall not withhold, fail to offer, or
make impracticable a contract with a provi der on the basis of
independent practice or lack of hospital system affiliation.
K. All contracted entities shall:
1. Use the same drug formulary, which shall be established by
the Authority; and
2. Ensure broad access to pharmacies including, but not limited
to, pharmacies contracted with covered entities under Section 340B
of the Public Health Service Act. Such access shall, at a minimum,
meet the requirements of the Patient's Right to Pharmacy Choice Act,
Section 6958 et seq. of Title 36 of the Oklahoma Statutes.
ENR. S. B. NO. 1337 Page 22
L. Each contracted entity and each participating provider shall
submit data through the state-designated entity for health
information exchange to ensure effective systems and connectivity to
support clinical coordination of care, the exchange of information,
and the availability of data to the Authority to manage the stat e
Medicaid program.
SECTION 10. AMENDATORY 56 O .S. 2021, Section 4002.6, is
amended to read as follows:
Section 4002.6. A. A managed care organization contracted
entity shall meet all requirements established by the Oklahoma
Health Care Authority pertaining to prior authorizations. The
Authority shall establish requirements that ensure timely
determinations by contracte d entities when prior authorizations are
required including expedited review in urgent and emergent cases
that at a minimum meet the criteria of this section.
B. A contracted entity shall make a determination on a request
for an authorization of the trans fer of a hospital inpatient to a
post-acute care or long-term acute care facility within twenty-four
(24) hours of receipt of the request.
B. Review and issue determinations made by a managed care
organization or, as appropriate, by a dental benefit manag er for
prior authorization for care ordered by primary care or specialist
providers shall be timely and shall occu r in accordance with the
following:
1. Within seventy-two (72) hours of receipt of the
C. A contracted entity shall make a determination on a request
for any patient member who is not hospitalize d at the time of the
request within seventy-two (72) hours of receipt of the request;
provided, that if the request does not inclu de sufficient or
adequate documentation, the review and issue determination shall
occur within a time frame and in accordance with a process
established by the Authority. The process e stablished by the
Authority pursuant to this paragraph subsection shall include a time
frame of at least forty-eight (48) hours within which a provider may
submit the necessary documentation ;
ENR. S. B. NO. 1337 Page 23
2. Within one (1) business day of receipt of the .
D. A contracted entity shall make a determination on a request
for services for a h ospitalized patient member including, but not
limited to, acute care in patient services or equipment necessary to
discharge the patient member from an inpatient facility; within one
(1) business day of receipt of the request.
3. E. Notwithstanding the pro visions of paragraphs 1 or 2 of
this subsection C of this section, a contracted entity shall make a
determination on a reques t as expeditiously as necessary and, in any
event, within twenty-four (24) hours of receipt of the request for
service if adhering to the provisions of paragraphs 1 or 2 of this
subsection C or D of this section could jeopardize the enrollee's
member's life, health or ability to attain, maintain or regain
maximum function. In the event of a medically emergent matter, the
managed care organization or dental benefit manager contracted
entity shall not impose limitations on providers in coordination of
post-emergent stabilization health care including pre -certification
or prior authorization;.
4. F. Notwithstanding any other provision o f this subsection
section, a contracted entity shall make a determination on a request
for inpatient behavioral health servic es within twenty-four (24)
hours of receipt of the request for inpatient behavioral health
services; and
5. Within twenty-four (24) hours of receipt of the.
G. A contracted entity shall make a determination on a request
for covered prescription drugs tha t are required to be prior
authorized by the Authority within twenty-four (24) hours of receipt
of the request. The managed care organization contracted entity
shall not require prior authorization on any covered prescription
drug for which the Authority does not require prior authorization.
C. H. Upon issuance of an adverse determination on a prior
authorization request under subsecti on B of this section, the
managed care organization or dental benefit manager contracted
entity shall provide the requesting provider, within seventy-two
(72) hours of receipt of suc h issuance, with reasonable opportunity
to participate in a peer-to-peer review process with a provider who
ENR. S. B. NO. 1337 Page 24
practices in the same specialty, but not necessarily the same sub-
specialty, and who has experience treating the same population as
the patient on whose behalf the request is submitted; prov ided,
however, if the requesting provider determin es the services to be
clinically urgent, the managed care organization or dental benefit
manager contracted entity shall provide such opportunity within
twenty-four (24) hours of receipt of such issuance. Services not
covered under the state Medicaid program for the partic ular patient
shall not be subject to peer-to-peer review.
D. I. The Authority shall ensure that a provider offers to
provide to an enrollee in a timely manner services authorized by a
managed care organiza tion or dental benefit manager contracted
entity.
J. The Authority shall establish requirements for both internal
and external reviews and appeals of adverse determinations on prior
authorization requests or claims that, at a minimum:
1. Require contracted entities to pro vide a detailed
explanation of denials to Medicaid providers an d members;
2. Require contracted entities to provide a prompt opportunity
for peer-to-peer conversations with licensed clinical staff of the
same or similar specialty which shall include, but not be limited
to, Oklahoma-licensed clinical staff upon adverse determination; and
3. Establish uniform rules for Medica id provider or member
appeals across all contracte d entities.
SECTION 11. AMENDATORY 56 O.S. 2021, Sect ion 4002.7, is
amended to read as follows:
Section 4002.7. A managed care organization or dental benefit
manager shall
A. The Oklahoma Health Care Authority shall establish
requirements for fair processing and adjudication of claims that
ensure prompt reimbursement of providers by contracted entities. A
contracted entity sh all comply with the following requirements with
respect to processing and adjudication of claims for payment
submitted in good faith by providers for health care items and
ENR. S. B. NO. 1337 Page 25
services furnished by such providers to enrollees of the state
Medicaid program: all such requirements.
1. B. A managed care organization or d ental benefit manager
contracted entity shall process a clean claim in the time frame
provided by Section 1219 of Title 36 of the Oklahoma Statutes and no
less than ninety percent (90%) of all clea n claims shall be paid
within fourteen (14) days of submiss ion to the managed care
organization or dental ben efit manager contracted entity. A clean
claim that is not processed within the time frame provided by
Section 1219 of Title 36 of the Oklahoma Sta tutes shall bear simple
interest at the monthly rate of one and one-half percent (1.5%)
payable to the provid er. A claim filed by a provider within six (6)
months of the date the item or service was furnished to an enrollee
a member shall be considered ti mely. If a claim meets the
definition of a clean claim, th e managed care organization or dental
benefit manager contracted entity shall not request medical records
of the enrollee member prior to paying the claim. Once a claim has
been paid, the managed care organization or dental benefit manager
contracted entity may request medical records if additional
documentation is needed to review the claim for medical necessity;.
2. C. In the case of a denial of a claim including, but not
limited to, a denial on the basis of the level of emergency care
indicated on the claim, the managed care organization or dental
benefit manager contracted entity shall establish a process by which
the provider may identify and provide such additional information as
may be necessary to substantiate the claim. Any such claim denial
shall include the following:
a. a
1. A detailed explanation of the basis for the denial,; and
b. a
2. A detailed description of the addi tional information
necessary to substantiate the claim ;.
3. D. Postpayment audits by a managed care organization or
dental benefit manager contracted entity shall be subject to the
following requirements:
ENR. S. B. NO. 1337 Page 26
a. subject
1. Subject to subparagraph b paragraph 2 of this paragraph
subsection, insofar as a managed care organization or dental benefit
manager contracted entity conducts postpayment audits, the managed
care organization or dental benefit manager contracted entity shall
employ the postpayment audit pr ocess determined by the Authority ,;
b. the
2. The Authority shall establish a limit on the percentage of
claims with respect to which postpayment audits may be conducted by
a managed care organization or dental benefit manager contracted
entity for health care items and services furnished by a provider in
a plan year,; and
c. the
3. The Authority shall provide for the imposition of financial
penalties under such contract in the case of any managed care
organization or dental benefit manager contracted entity with
respect to which the Authority determines has a claims denial error
rate of greater than five percent (5%). The Authority shall
establish the amount of financial penalties and the time frame under
which such penalties shall be imposed on managed care organizations
and dental benefit managers contracted entities under this
subparagraph paragraph, in no case less than annually; and.
4. E. A managed care organization contracted entity may only
apply readmission penalties pursuant to rules promulgate d by the
Oklahoma Health Care Authority Board. The Boa rd shall promulgate
rules establishing a program to reduce potentially preventable
readmissions. The program shall use a nationally recognized tool,
establish a base measurement year and a performance year, and
provide for risk-adjustment based on the pop ulation of the state
Medicaid program covered by the managed care organizations and
dental benefit managers contracted entities.
SECTION 12. AMENDATORY 56 O.S. 2021, Section 4002.8, is
amended to read as follows :
ENR. S. B. NO. 1337 Page 27
Section 4002.8. A. A managed care organization or dental
benefit manager contracted entity shall utilize uniform procedures
established by the Authority under subsection B of this section for
the review and appeal of any adverse determination by the managed
care organization or dental benefit manager contracted entity sought
by any enrollee or provider adversely affected by such
determination.
B. The Authority shall develop procedures fo r enrollee
enrollees or providers to seek review by the managed care
organization or dental benefit manager contracted entity of any
adverse determination made by the managed care organization or
dental benefit manager contracted entity. A provider shall have six
(6) months from the recei pt of a claim denial to file an appeal.
With respect to appeals of adverse determinations made by a managed
care organization or dental benefit manager contracted entity on the
basis of medical necessity, the following requirem ents shall apply:
1. Medical review staff of the managed care organization or
dental benefit manager contracted entity shall be licensed or
credentialed health care clinicians with relevant clinical training
or experience; and
2. All managed care organizations and dental benefit managers
contracted entities shall use medical revi ew staff for such appeals
and shall not use any automated claim review software or other
automated functionality for such appeals.
C. Upon receipt of notice from the managed care organization or
dental benefit manager contracted entity that the adverse
determination has been upheld on appeal, the enrollee or provider
may request a fair hearing from the Authority. The Authority shall
develop procedures for fair hearings in accordance with 42 C.F.R.,
Part 431.
SECTION 13. AMENDATORY 56 O.S. 2021, Section 4002.10, is
amended to read as follows:
Section 4002.10. A. The Oklahoma Health Care Authori ty shall
require a managed care organization or dental benefit mana ger all
contracted entities to participate in a readiness review in
accordance with 42 C.F.R., Section 438.66. The readiness review
ENR. S. B. NO. 1337 Page 28
shall assess the ability and capacity of the managed care
organization or dental benefit manager contracted entity to perform
satisfactorily in such areas as may be specified in 42 C.F.R.,
Section 438.66. In addition, the readiness review shall assess
whether:
1. The managed care organization or dental benefi t manager has
entered into contracts with providers to the extent n ecessary to
meet network adequacy standards prescribed by Section 4 of this act;
2. The contracts described in paragraph 1 of this subsection
offer, but do not require, value-based payment arrangements as
provided by Section 12 of this act; and
3. The managed care organization or dental benefit manager and
the providers described in paragraph 1 of this subsection have
established and tested data infrastructure such that exchange of
patient data can reasonably be expected to occur within one hundred
twenty (120) calendar days of ex ecution of the transition of the
delivery system described in subsection B of this section. The
Authority shall assess its ability to facilitate the exchange of
patient data, claims, coordination of benefits and other components
of a managed care delivery model.
B. The Oklahoma Health Care Auth ority may only execute the
transition of the delivery system of the state Medicaid program to
the capitated managed care d elivery model of the state Medicaid
program ninety (90) days after the Centers for Medicare a nd Medicaid
Services has approved all con tracts entered into between the
Authority and all managed care organizations and dental benefit
managers following submiss ion of the readiness reviews to the
Centers for Medicare and Medica id Services.
SECTION 14. AMENDATORY 56 O.S. 2021, Section 4002.11, is
amended to read as follows:
Section 4002.11. No later than one (1) year following the
execution of the delivery model transition described in Section 10
of this act the Ensuring Access to M edicaid Act, the Oklahoma Health
Care Authority shall create a scorecard that compares managed care
organizations each contracted entity and separately compares each
dental benefit managers manager. The scorecard shall report the
ENR. S. B. NO. 1337 Page 29
average speed of authoriz ations of services, rates of denials o f
Medicaid reimbursable services when a complete authorization request
is submitted in a timely manner, enrollee member satisfaction survey
results, provider satisfaction survey results, and such other
criteria as the Authority may require. The scorecard shall be
compiled quarterly a nd shall consist of the information specified in
this section from the prior year quarter. The Authority shall
provide the most recent quarterly scorecard to all initial enrollees
members during enrollment choice counseling following the
eligibility determination and prior to initial enrollment. The
Authority shall provide the most recent quarterly scorecard to all
enrollees members at the beginning of each enrollment peri od. The
Authority shall publish each quarterly scorecard on its public
Internet website.
SECTION 15. AMENDATORY 56 O.S. 2021, Section 4002.12, is
amended to read as follows:
Section 4002.12. A. The Until July 1, 2026, the Oklahoma
Health Care Authority shall establish minimum rates of reimbursement
from managed care organizations and dental benefit managers
contracted entities to providers who elect not to enter into value-
based payment arrangements under subsection B of this section or
other alternative payment agreements for health care items and
services furnished by such providers to enrollees of the state
Medicaid program. Until Except as provided by subsection I of this
section, until July 1, 2026, such reimbursement rates shall be equal
to or greater than:
1. For an item or service provided by a pa rticipating provider
who is in the network of the managed care organization or dental
benefit manager contracted entity, one hundred percent (100%) of the
reimbursement rate fo r the applicable service in the applicable fee
schedule of the Authority; or
2. For an item or se rvice provided by a non-participating
provider or a provider who is not in the network of the managed care
organization or dental benefit manager contracted entity, ninety
percent (90%) of the reimbursement rate for the applicable service
in the applicable fee schedule of t he Authority as of January 1,
2021.
ENR. S. B. NO. 1337 Page 30
B. A managed care organization or dental benefit manager
contracted entity shall offer value-based payment arrangements to
all providers in its network cap able of entering into value-based
payment arrangements. Such arrangements shall be optional for the
provider but shall be tied to reimbursement incentives when quality
metrics are met. The quality measures used by a managed care
organization or dental bene fit manager contracted entity to
determine reimbursement amounts to providers in value-based payment
arrangements shall align with the quality measures of the Authority
for managed care organizations or dental benefit managers contracted
entities.
C. Notwithstanding any other provision of this section, the
Authority shall comply with payment methodologies required by
federal law or regulation for specific types of providers including,
but not limited to, Federally Qualified Health Centers, rural health
clinics, pharmacies, Indian Health Care Providers and em ergency
services.
D. A contracted entity shall offer all rural health clinics
(RHCs) contracts that reimburse RHCs using the methodology in place
for each specific RHC prior to January 1, 2023 , including any and
all annual rate updates . The contracted entity shall co mply with
all federal program rules and requirements, and the transformed
Medicaid delivery system shall not interfere with the program as
designed.
E. The Oklahoma Health Care Authority shall establish minimum
rates of reimbursement from contrac ted entities to Certified
Community Behavioral Health Clinic (CCBHC) providers who elect
alternative payment arrangements equal to the prospectiv e payment
system rate under the Medicaid State Plan .
F. The Authority shall establish an incentive payment under the
Supplemental Hospital Offset Payment Program that is determined by
value-based outcomes for providers other than hospitals.
G. Psychologist reimbursement shall reflect out comes.
Reimbursement shall not be limited to therapy and shall include but
not be limited to testing and assessment.
ENR. S. B. NO. 1337 Page 31
H. Coverage for Medicaid ground transportation services by
licensed Oklahoma emergency medical services shall be reimbursed at
no less than the publish ed Medicaid rates as set by the Authority.
All currently published Medicaid Healthcare Common Procedure Coding
System (HCPCS) codes paid by the Authority shall continue to be paid
by the contracted entity. The contracted entity shall comply with
all reimbursement policies establis hed by the Authority for the
ambulance providers. Contracted entities shall accept the modifiers
established by the Centers for Medicare and Medicaid Services
currently in use by Medicare at the time of the transport of a
member that is dually eligible for Medicare and Medicaid .
I. The rate paid to participating pharmacy providers is
independent of subsection A of this se ction and shall be the same as
the fee-for-service rate employed by the Authority for th e Medicaid
program as stated in the payment methodology at OAC 317:30 -5-78,
unless the participating pharmacy provider elects to ente r into
other alternative payment ag reements.
J. The Authority shall specify in the requests for proposals a
reasonable time frame in which a contracted entity shall have
entered into a certain percentage, as determined by t he Authority,
of value-based contracts with providers.
K. Capitation rates established by the Oklahoma Health Care
Authority and paid to contracted enti ties under capitated contracts
shall be updated annually and in accordance with 42 C.F.R., Section
438.3. Capitation rates shall be approved as actuarially sound as
determined by the Centers for Medicare and Medicaid Services in
accordance with 42 C.F.R., Section 438.4 and the following:
1. Actuarial calculations must include utilization and
expenditure assumptions consistent with industry and local
standards; and
2. Capitation rates shall be risk-adjusted and shall include a
portion that is at risk for achievement of quality and outcomes
measures.
L. The Authority may establish a symmetric risk corridor for
contracted entities.
ENR. S. B. NO. 1337 Page 32
M. The Authority shall establish a process for annual recovery
of funds from, or assessment of penalties on, contracted entities
that do not meet the medical loss ratio standards stipulated in
Section 4002.5 of this title.
N. 1. The Authority shall, thro ugh the financial reporting
required under subsection G of S ection 17 of this act, deter mine the
percentage of health care expenses by each contracted entity on
primary care services.
2. Not later than the end of the fourth year of the initial
contracting period, each contracted entity shall be currently
spending not less than eleven percent (11%) of its total health care
expenses on primary care services.
3. The Authority shall monitor the primary care sp ending of
each contracted entity and require each contracted entity to
maintain the level of spending on primary care services stipulated
in paragraph 2 of this subsection.
SECTION 16. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Sect ion 4002.12a of Title 56, unless
there is created a duplication in numbering, reads a s follows:
A. All dental benefit managers shall maintain a Medicaid Dental
Advisory Committee, comprised exclusively of Oklahoma-licensed
dentists and specialists, to advise dental benefit managers
regarding quality mea sures.
B. Dental providers shall not be required to enter into
capitated contracts with a dental benefit manager.
SECTION 17. NEW LAW A new secti on of law to be codified
in the Oklahoma Statutes as Section 4002.12b of Title 56, unless
there is created a duplication in numbering, reads as follows:
A. The Oklahoma Health Care Authority shall ensure the
sustainability of the transformed Medicaid deli very system.
B. The Authority shall ensure that existing revenue sources
designated for the stat e share of Medicaid expenses are designed to
ENR. S. B. NO. 1337 Page 33
maximize federal matching funds for the benefit of providers and the
state.
C. The Authority shall develop a plan , utilizing waivers or
Medicaid state plan amendme nts as necessary, to preserve or increase
supplemental payments available to providers with existing revenue
sources as provided in the Oklahoma Statutes including, but not
limited to:
1. Hospitals that par ticipate in the supplemental hospital
offset payment program as provided by Section 3241.3 of Ti tle 63 of
the Oklahoma Statutes;
2. Hospitals in this state that have Level I trauma centers, as
defined by the American College of Surgeons, that provide inpatient
and outpatient services and are owned or operated by the University
Hospitals Trust, or af filiates or locations of those hospitals
designated by the Trust as part of the hospital trauma system; and
3. Providers employed by or contracted with, or other wise a
member of the faculty practice plan of:
a. a public, accredited Oklahoma medical school , or
b. a hospital or health care entity directly or
indirectly owned or operated by the University
Hospitals Trust or the Oklahoma State University
Medical Trust.
D. Subject to approval by the Centers for Me dicare and Medicaid
Services, the Authority sha ll preserve and, to the maximum extent
permissible under federal law, improve existing levels of funding
through directed payments or other mechanisms outside the capitated
rate to contracted entities, including, where applicable, the use of
a directed payment program with an average commercial rate
methodology under the Supplemental H ospital Payment Program Act.
E. On or before January 31, 2023, the Authority shall subm it a
report to the Oklahoma Health Care Authority Board, the Chair of the
Appropriations Committee of the Oklahoma State Senate, and the Chair
of the Appropriations and Budget Committee of the Oklahoma House of
Representatives that includes the Authority's plans to continue
ENR. S. B. NO. 1337 Page 34
supplemental payment programs and implement a managed care directed
payment program for hospital services that complies with the reforms
required by this act. If Medicaid-specific funding cannot be
maintained as currently implemented and authorized by state law, the
Authority shall propose to the Legislature any modification s
necessary to preserve supplemental payments and managed care
directed payments to prevent budgetary disruptions to providers.
F. The Authority shall submit a report to the Governor, the
President Pro Tempore of the Oklahoma State Senate and the Speaker
of the Oklahoma House of Representatives that includes at a mi nimum:
1. A description of the selection process o f the contracted
entities;
2. Plans for enrollment of Medicaid members in health plans of
contracted entities;
3. Medicaid member network acc ess standards;
4. Performance and quality metrics;
5. Maintenance of existing funding mechanisms described in t his
section;
6. A description of the requirements and other provisions
included in capitated contra cts; and
7. A full and complete copy of ea ch executed capitated
contract.
G. 1. Each contracted entity shall report to the Authority in
time intervals determined by the Authority and through a process
determined by the Authority all claims data, expenditures, and such
other financial reporting information as may be required by the
Authority.
2. The Authority shall compile and analyze the information
described in paragraph 1 of this subsection and annually submit a
report summarizing such information, devoid of any personally
identifying informat ion, to the President Pro Tempore of the Senate,
ENR. S. B. NO. 1337 Page 35
the Speaker of the House o f Representatives, and the Oklahoma Health
Care Authority Board.
SECTION 18. AMENDATORY 56 O.S. 2021, Section 4002.13, is
amended to read as follows:
Section 4002.13. A. There is hereby created the MC The
Oklahoma Health Care Authority shall establish a Medicaid Deliver y
System Quality Advisory Committee for the purpose of performing the
duties specified in subsection B of t his section.
B. The primary power and duty of the Committee shall be have
the power and duty to make recommendations to the Administrator of
the Oklahoma Health Care Authority and the Oklahoma Health Care
Authority Board on quality measures used by managed care
organizations and dental benefit managers contracted entities in the
capitated managed care delivery model of the state Medicaid program .
C. 1. The Committee shall be comprised of members appointed by
the Administrator of the Oklahoma Health Care Authority. Members
shall serve at the pleasure of the Administrator.
2. A majority of the membe rs shall be providers participati ng
in the capitated managed care delivery model of the state Medicaid
program, and such providers may include memb ers of the Advisory
Committee on Medical Care for Public Assistance Recipients. Other
members shall include, but not be limited to, represent atives of
hospitals and integrated health systems, other members of the health
care community, and members of the academic community having
subject-matter expertise in the field of health care or subfields of
health care, or other applicable fields includi ng, but not limited
to, statistics, economics or public policy.
3. The Committee shall select from among its memb ership a chair
and vice chair.
E. D. 1. The Committee may meet as often as may be required in
order to perform the duties imposed on it.
2. A quorum of the Committee shall be required to approve any
final action recommendations of the Committee. A majo rity of the
members of the Committee shall constitute a quorum.
ENR. S. B. NO. 1337 Page 36
3. Meetings of the Committee shall be subject to the Oklahoma
Open Meeting Act.
F. E. Members of the Committee shall receive no compensation or
travel reimbursement.
G. F. The Oklahoma Health Care Authority shall provide staff
support to the Committee. To the extent allowed under federal or
state law, rules or regulations, the A uthority, the State Department
of Health, the Department of Mental Health and Substance Abuse
Services and the Dep artment of Human Services shall as requested
provide technical expertise, statistical information, and any ot her
information deemed necessary by the chair of the Committee to
perform the duties imposed on it.
SECTION 19. NEW LAW A ne w section of law to be codified
in the Oklahoma Statutes as Section 4002.14 of Title 56, unless
there is created a duplication in numbering, r eads as follows:
A. The transformed delivery system of the state Medicaid
program and capitated contracts awarded under the transformed
delivery system shall be designed with uniform defined measures and
goals that are consistent across contracted entitie s including, but
not limited to, adjusted health outcomes, social determinants of
health, quality of care, member satisfaction, provider satisfaction,
access to care, network adequacy, and cost.
B. Prior to implementation of the transformed Medicaid delivery
system, each contracted entity shall use nationally recognized,
standardized provider quality metr ics as established by the Oklahoma
Health Care Authority and, where applicable, may use additional
quality metrics if th e measures are mutually agreed upon by the
Authority, the contracted entity, and participating providers. The
Authority shall develop p rocesses for determining quality metrics
and cascading quality metrics from contracted entities to
subcontractors and pr oviders.
C. The Authority may use consultants, organ izations, or
measures used by health plans, the federal government, or other
states to develop effective measures for outcomes and quality
including, but not limited to, the National Committee for Quali ty
ENR. S. B. NO. 1337 Page 37
Assurance (NCQA) or the Healthcare Effect iveness Data and
Information Set (HEDIS) established by NCQA, the Physician
Consortium for Performance Improvement (PCPI) or any measures
developed by PCPI.
D. Each component of the quality metrics established by the
Authority shall be subject to specific accountability measures
including, but not limited to, penalties for noncompliance.
SECTION 20. AMENDATORY 56 O.S. 2021, Section 4004, is
amended to read as follows:
Section 4004. A. 1. The Oklahoma Health Care Authority shall
seek any federal approval necessary to implement this act the
Ensuring Access to Medicaid Act. This sh all include, but not be
limited to, submission to the Centers for Medicare and Medicaid
Services of any appr opriate demonstration waiver application or
Medicaid State Plan amendment necessary to accomplish the
requirements of this act within the required time frames.
2. Prior to implementation of contracts with any contracted
entities except dental benefit man agers, the Authority shall obtain
federal approval of a ma naged care directed payment program with an
average commercial rate methodology under the Supplemental Hospital
Offset Payment Program Act. Contracts with dental benefit managers
shall be exempt from the requirement stipulated by this paragraph.
B. The Oklahoma Health Care Authority Board shall promul gate
rules to implement this act the Ensuring Access to Medicaid Act.
SECTION 21. AMENDATORY 63 O.S. 2021, Section 5009, is
amended to read as follows:
Section 5009. A. On and after July 1, 1993, the Oklahoma
Health Care Authority shall be the state entity designated by law to
assume the responsibilities for the preparation and development for
converting the present delivery of the Oklahoma Medicaid Program to
a managed care syste m. The system shall emphasize:
1. Managed care prin ciples, including a capitated, prepaid
system with either full or partial capitation, provided that highest
ENR. S. B. NO. 1337 Page 38
priority shall be given to development of prepaid capitated health
plans;
2. Use of primary ca re physicians to establish the appropriate
type of medical care a Medicaid recipient should receive; and
3. Preventative care.
The Authority shall also study the feasibility of allowing a
private entity to administer all or part of the managed care system .
B. On and after January 1, 1995, the Oklahoma Health Care
Authority shall be the designated state agency for the
administration of the Oklahoma Medicaid Program.
1. The Authority shall contr act with the Department of Human
Services for the determinatio n of Medicaid eligibility and other
administrative or operational functions related to the Oklahoma
Medicaid Program as necessary and appropriate.
2. To the extent possible and appropriate, up on the transfer of
the administration of the Oklahoma Medicaid Program, the Authority
shall employ the personnel of the Medical Services Division of the
Department of Human Services.
3. The Department of Human Services and the Authority shall
jointly prepare a transition plan for the transfer of the
administration of the Oklahoma Medicaid Program to the Authority.
The transition plan shall include provisions for the retraining and
reassignment of employees of the Department of Human Services
affected by the transfer. The transition plan shall be submitted to
the Governor, the President Pro Tempore of the Senate and th e
Speaker of the House of Representatives on or before January 1,
1995.
C. B. In order to provide adequate funding for the unique
training and research purposes associated with the demonstration
program conducted by the entity described in paragraph 7 of
subsection B of Section 6201 of Title 74 of the Oklahoma Statutes,
and to provide services to persons without regard to their ability
to pay, the Oklahoma Health Care Authority shall analyze the
feasibility of establishing a Medicaid reimbursement methodol ogy for
ENR. S. B. NO. 1337 Page 39
nursing facilities to provide a separate Medicaid payment rate
sufficient to cover all costs allowable under Medicare principles o f
reimbursement for the facility to be constructed or operated, o r
constructed and operated, by the organization descr ibed in paragraph
7 of subsection B of Section 6201 of Title 74 of the Oklahoma
Statutes.
SECTION 22. AMENDATORY 36 O.S. 2021, Section 624, is
amended to read as follows:
Section 624. A. Every insurance company, copartnership,
insurance association, interinsurance ex change, person, insur er,
nonprofit hospital service and medical indemnity corpo ration, or
health maintenance organization doing business in this state in the
execution or exchange of contracts of insurance, indemnity or he alth
maintenance services, or as a n insurance company o f any nature or
character whatsoever, hereinafter referred to in this article as an
insurance company or company, shall annually, on or before the first
day of March, report under oath of the president or secretary or
other chief officer of such company to the Insurance Commissioner
the total amount of direct wri tten premiums, membership,
application, policy and/or registration fees charged during the
preceding calendar year, or since the last return of such direct
written premiums, mem bership, application, policy and/or
registration fees wa s made by such company, from insurance of every
kind upon persons or on the lives of persons resident in this state,
or upon real and personal property located within this state, and/or
upon any other risks insured within this state, provided, that with
respect to the tax payabl e annually, considerations received for
annuity contracts and payments received by a health maintenance
organization from the Secretary of Heal th and Human Services
pursuant to a contract issued und er the provisions of 42 U.S.C.,
Section 1395mm(g) shall no longer be deemed to be premiums for
insurance and shall no longer be subject to the tax imposed by this
section. Every such company shall, at the same time, pay to the
Insurance Commissioner:
1. An annual license fee as prescribed by Section 321 of this
title; and
2. An annual tax on all of the direct written premiums after
all returned premiums are deducted, and on all membership,
ENR. S. B. NO. 1337 Page 40
application, policy and/or registration fees , installment and/or
finance fees or charges collected t hereby, for the privile ges of
having written, continued and/or serviced insurance on lives,
property and/or other risks in this state and of having made and
serviced investments therein during the the n expiring license ye ar
except premiums or fees paid by any county, city, town or school
district funds or by their duly constituted authorities performing a
public service organized pursuant to Sections 1001 through 1008 of
Title 74 of the Oklahoma Statut es, or Sections 176 t hrough 180.4 of
Title 60 of the Oklahoma Statutes. Provid ed, no deduction shall be
made from premiums for dividends paid to policyholders. Except as
set forth in this paragraph, the rate of taxation for all entities
subject to the tax shall be two and tw enty-five one-hundredths
percent (2.25%). If any insuranc e company or other entity liable
for the taxes levied pursuant to the provisions of this section
fails to remit such taxes in a timely manner, it shall remain liable
therefor together with interest thereon at an annual rate equal to
the average United Stat es Treasury Bill rate of the preceding
calendar year as certified by the State Treasurer on the first
regular business day in January of each y ear, plus four percentage
points.
a. The rate of taxation for all life insurance policies
insuring the life of an employee or director for the
benefit of the employer or a trust sponsored by the
employer, which is purchased by the employer or trust
sponsored by the employer for the benefit of its
employees, shall be computed for each policy at the
rate of:
(1) two and twenty-five one-hundredths percent
(2.25%) of policy year premium up to One Hundred
Thousand Dollars ($100,000.00), and
(2) one-tenth of one percent (1/10 of 1%) of policy
year premium exceeding O ne Hundred Thousand
Dollars ($100,000.00).
b. Premiums on which taxes are paid under division (2) of
subparagraph a of this paragraph are not subject to
Section 628 of this title. The Commissioner sha ll
promulgate rules regarding the sale of life insuranc e
ENR. S. B. NO. 1337 Page 41
policies subject to division (2) of subparagraph a of
this paragraph.
c. Proceeds from the premium tax collected under this
paragraph from contracted entities under the Ensuring
Access to Medicaid Act shall be deposited in the
Medicaid Health Improvement Revolving Fund created in
Section 23 of this act. The provisions of this
subparagraph shall not be construed to affect or
modify the apportionments provided in Section 312. 1 of
this title.
B. For all insurance companies or other e ntities taxed pursuant
to this section, the annual license fee and tax and all re quired
membership, application, policy, registration, and agent appointment
fees shall be in lieu of all other state taxes or fees, except thos e
taxes and fees provided for in the Insurance Code, an d the taxes and
fees of any subdivision or municipality of the state, except ad
valorem taxes and the tax required to be paid pursuant to Section
50001 of Title 68 of the Oklahoma Statutes. Provided, such license
fee, tax and membership, application, poli cy, registration, and
appointment fees shall be in lieu of any and all ad valorem taxes
levied on intangible personal property. Any company, except health
maintenance organizations, failing to make su ch returns and payments
promptly and correctly shall fo rfeit and pay to the Insurance
Commissioner, in addition t o the amount of the taxes and fees and
interest, the sum of Five Hundred Dollars ($500.00) or an amount
equal to one percent (1%) of the unpaid amount, whichever is
greater; and the company so faili ng or neglecting for sixty (60)
days shall thereafter be d ebarred from transacting any business of
insurance in this state until the taxes, fees and penalties are
fully paid, and the Insurance Commissi oner shall revoke the license
or certificate of authori ty granted to the agent or agents o f that
company to transact business in this state. Provided, that when any
such insurance company, copartnership, insurance association,
interinsurance exchange, per son, insurer, or nonprofit hospi tal
service and indemnity corporation, applies for the fir st time for a
license to do business in Oklahoma, it shall, at the time of making
such application, pay a license fee as prescribed by Section 1425 of
this title, and, on or before the first day of March, following, pay
the premium tax, membership, applica tion, policy, registrat ion, and
agent appointment fees, as hereinbefore provided. Such license fee,
ENR. S. B. NO. 1337 Page 42
tax and membership, application, policy, registration, and
appointment fees shall be in lieu of a ll other state taxes or fees,
except those taxes and fees provided for in the Ins urance Code, and
the taxes and fees of any subdivision or municipality of the state,
except ad valorem taxes and the tax required to be paid pu rsuant to
Section 50001 of Title 68 of the Oklahoma Sta tutes.
C. Any health maintenance o rganization failing to file premium
tax returns and payments promptly and correctly shall forfeit and
pay to the Insurance Commissioner, in addition to the amount of the
taxes, the sum of Five Hundr ed Dollars ($500.00) or an amount equal
to one percent (1%) of the unpaid amount, whichever is greater. Any
health maintenance organization failing or neglecting to pay the tax
and penalty shall be debarred from operating i n this state and the
Insurance Commissioner shall revok e the license of the health
maintenance organization, unti l such taxes and penalties are fully
paid.
SECTION 23. NEW LAW A new section of law to be codified
in the Oklahoma Statu tes as Section 1010.8A of Title 56, unless
there is created a duplication in numbering, re ads as follows:
There is hereby created in the State Treasury a revolving fund
for the Oklahoma Health Care Authority to be designated the
"Medicaid Health Improvemen t Revolving Fund". The fund shall be a
continuing fund, not subject to fiscal year limita tions, and shall
consist of all monies received from the premium tax levied on
contracted entities under paragraph 2 of subsection A of Section 624
of Title 36 of the Oklahoma Statutes and such other funds as may be
provided by law. All monies accruing to the credit of the fund are
hereby appropriated and may be budgeted and expended by the
Authority for the following purpos es:
1. To supplement the state Medicaid program;
2. To supplement the Supplemental Hospital Offse t Payment
Program; and
3. To supplement the Rate Preserva tion Fund created in Section
5020A of Title 63 of the Oklahoma Statutes .
ENR. S. B. NO. 1337 Page 43
Expenditures from the fund shall be made upon warrants issued by
the State Treasurer against claims filed as prescribed by la w with
the Director of the Office of Management and Enterp rise Services for
approval and payment.
SECTION 24. RECODIFICATION 56 O.S. 2 021, Section 4004,
as amended by Section 20 of this act, shall be recodified as Section
4002.15 of Title 56 of the Oklahoma Statutes, unless there is
created a duplication in numbering.
SECTION 25. REPEALER 5 6 O.S. 2021, Sections 101 0.2,
1010.3, 1010.4, 1010.5, and 1010.8, are hereby repealed.
SECTION 26. REPEALER 56 O.S. 2021, Sections 4002.3 and
4002.9, are hereby repealed.
SECTION 27. REPEALER 63 O.S. 2021, Sections 5009.5,
5011, and 5028, are hereby repealed.
SECTION 28. The provisions of this act s hall not become
effective as law unless Enrolled Senate Bill No. 1396 of the 2nd
Session of the 58th Oklahoma Legislature becomes effective as law.
SECTION 29. This act shall become effective July 1, 2022.
SECTION 30. It being immediatel y necessary for the preservation
of the public peace, health or safety, an emergency is hereb y
declared to exist, by reason whereof this ac t shall take effect and
be in full force from and after its passage and approval.
ENR. S. B. NO. 1337 Page 44
Passed the Senate the 19th day of May, 2022.
Presiding Officer of the Senate
Passed the House of Representatives the 20th day of May, 2022.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governor of the State of Oklahoma this _____ ____
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _______________________________ __