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STATE OF OKLAHOMA
2nd Session of the 59th Legislature (2024)
COMMITTEE SUBSTITUTE
FOR
SENATE BILL 1675 By: McCortney
COMMITTEE SUBSTITUTE
An Act relating to the state Medicaid program;
amending Section 3, Chapter 395, O.S.L. 2022 (56 O.S.
Supp. 2023, Section 4002.3a) , which relates to
capitated contracts for delivery of Medicaid
services; extending certain deadlines; amending 56
O.S. 2021, Section 4002.4, as amended by Section 7,
Chapter 395, O.S.L. 2022 (56 O.S. Supp. 2023, Section
4002.4), which relates to n etwork adequacy standards
for contracted entities; imposing certain deadline on
credentialing or recredentialing by contracted
entities; amending 56 O.S. 2021, Section 4002.6, as
last amended by Section 2, Chapter 331, O.S.L. 2023
(56 O.S. Supp. 2023, Section 4002.6) , which relates
to requirements for prior authorizations ; modifying
and adding deadlines for certain determinations and
reviews; requiring certain reviews to be conducted by
Oklahoma-licensed clinical staff; amending 56 O.S.
2021, Section 4002.7, as amended by Section 11,
Chapter 395, O.S.L. 2022 (56 O.S. Supp. 2023, Section
4002.7), which relates to requirements for processing
and adjudicating claims; expanding certain provisions
to include downgraded claims; specifying certa in
limit on claims subject to postpayment audit s;
amending 56 O.S. 2021, Section 4002.12, as last
amended by Section 1, Chapter 308, O.S.L. 2023 (56
O.S. Supp. 2023, Section 4002.12) , which relates to
minimum rates of reimburs ement; extending certain
deadline; updating statutory references; updating
statutory language; and declaring an emergency.
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BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 3, Chapter 395, O.S.L.
2022 (56 O.S. Supp. 2023, Section 4002.3a), is amended to read as
follows:
Section 4002.3a. 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 the
Ensuring Access to Medicaid Act to transform the deli very system of
the state Medicaid program for the 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 SoonerCare.
B. 1. The Oklahoma Health Care Authority shall issue a request
for proposals to enter into public-private partnerships wi th
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.
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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 denta l services including:
a. physical health services inclu ding, but not limited
to:
(1) primary care,
(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 April 1, 2024.
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 popul ations:
a. pregnant women,
b. children,
c. parents and caretaker relatives,
d. the expansion population, and
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e. members of the Children’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 April 1, 2024.
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
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 this
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 April 1, 2024.
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E. The Authority shall not implement the transfo rmation of the
Medicaid delivery system until it receives written confirmation from
the Centers for Medicare and Medicaid Services that a managed care
directed payment program utilizing average commercial rate
methodology for hospita l services under the Supplemental 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 sha ll prohibit
the Authority from exploring alternative opportunities with the
Centers for Medicare and Medicaid Services to maximize the average
commercial rate benefit.
SECTION 2. AMENDATORY 56 O.S. 2021, Section 4002.4, as
amended by Section 7, Chapter 395, O.S.L. 2022 (56 O.S. Sup p. 2023,
Section 4002.4), is amended to read as follows:
Section 4002.4. A. The Oklahoma Health Care Authority shall
develop network adequacy standards for all contracted entities that,
at a minimum, meet the requirements of 42 C.F.R., Sections 438.3 and
438.68. Network adequacy standards established under this
subsection shall include distance and time standards and shall be
designed to ensure members covered by the 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
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telehealth services wi th providers, especially adult and pediatric
primary care practitioners.
B. The Authority 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 such 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, provide rs who receive directed payments in
accordance with 42 C.F.R., Part 438 and such other providers as the
Authority may specify from contracts with contracted entities.
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 Section 4002.3a of this title.
D. All 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., Section
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438.214. A contracted entity shall complete credenti aling or
recredentialing of a provider within sixty (60) calendar days of
receipt of a completed application.
E. All 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 Services.
F. 1. If the Authority awards a capitated contract to a
provider-led entity for the urban region under Section 4 of this act
Section 4002.3b of this title, 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 Section 4002.3b of this title.
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 expansion to counties for
which the provider-led entity can demons trate evidence of network
adequacy as required under 42 C.F.R., Sections 438.3 and 438.68.
When approved, the additional county or counties shall be added to
the provider-led entity’s region during the next open enrollment
period.
SECTION 3. AMENDATORY 56 O.S. 2021, Section 4002.6, as
last amended by Section 2, Chapter 331, O.S.L. 2023 (56 O.S. Supp.
2023, Section 4002.6), is amended to rea d as follows:
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Section 4002.6. A. A 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 contracted
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 transfer 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.
C. A contracted entity shall make a determination on a request
for any member who is not hospitalized at the time of the request
within seventy-two (72) hours of receipt of the request; provided,
that if the request does not include sufficient or adequate
documentation, the review and determination shall occur within a
time frame and in accordance with a process established by the
Authority. The process established by the Authority pursuant to
this subsection shall include a time frame of at least forty-eight
(48) hours within which a provider may submit the necessary
documentation.
D. A contracted entity shall make a determination on a request
for services for a hospitalized member including, but not limited
to, acute care inpatient services or equipment necessary to
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discharge the member from an inpatient facility within one (1)
business day twenty-four (24) hours of receipt of the request.
E. Notwithstanding the provisions of subsection C of this
section, a contracted entity shall make a determination on a request
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 subsection C or D of this section could jeopardize the
member’s life, health or ability to attain, maintain or regain
maximum function. In the event of a medically emergent matter, the
contracted entity shall not impose limitations on providers in
coordination of post-emergent stabilization health care including
pre-certification or prior authorization.
F. Notwithstanding any other provision of this section, a
contracted entity shall make a determination on a request for
inpatient behavioral health services within twenty-four (24) hours
of receipt of the request.
G. A contracted entity shall make a determination on a request
for covered prescription drugs that are required to be prior
authorized by the Authority within twenty-four (24) hours of receipt
of the request. The contracted entity shall not require prior
authorization on any covered prescription drug for which the
Authority does not require prior authorization.
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H. A contracted entity shall make a determination on a request
for coverage of biomarker testing in accordance with Section 3 of
this act Section 4003 of this title.
I. Upon issuance of an adverse determination on a prior
authorization request under subsection B of this section, the
contracted entity shall provide the requesting provider, within
seventy-two (72) hours of receipt of such issuance, with reasonable
opportunity to participate in a peer-to-peer review process with a
provider who practices in the same specialty, but not necessarily
the same sub-specialty, and who has experience treating the same
population as the patient on w hose behalf the request is submitted;
provided, however, if the requesting provider determin es the
services to be clinically urgent, the 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 particular patient shall not be subject to peer-to-
peer review.
J. The Authority shall ensure that a provider offers to provide
to a member in a timely manner services authorized by a contracted
entity.
K. 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:
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1. Require contracted entities to provide a detailed
explanation of denials to Medicaid providers and members;
2. Require contracted entities to provide a prompt an
opportunity for peer-to-peer conversations with licensed Oklahoma-
licensed clinical staff of the same or similar specialty which shall
include, but not be limited to, Oklahoma-licensed clinical staff
upon within twenty-four (24) hours of the adverse determination; and
3. Establish uniform rules for Medicaid provider or member
appeals across all contracted entities.
SECTION 4. AMENDATORY 56 O.S. 2021, Section 4002.7, as
amended by Section 11, Chapter 395, O.S.L. 2022 (56 O.S. Supp. 2023,
Section 4002.7), is am ended to read as follows:
Section 4002.7. A. The Oklahoma Health Care Authority shall
establish requirements for fair processing and adjudication of
claims that ensure prompt re imbursement of providers by contracted
entities. A contracted entity sh all comply with all such
requirements.
B. A 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 ninet y percent (90%) of all clea n claims shall be
paid within fourteen (14) days of submission to the 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
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(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 a
member shall be considered ti mely. If a claim meets the definition
of a clean claim, the contracted entity shall not request medical
records of the member prior to paying the claim. Once a claim has
been paid, the contracted entity may request medical records if
additional documentation is needed to review the claim for medical
necessity.
C. In the case of a denial of a claim including, but not
limited to, a denial o n the basis of the level of emergency care
indicated on the claim, or in the case of a downgraded claim , the
contracted entity shall establish a process by which the provider
may identify and provide such additional informa tion as may be
necessary to substantiate the claim. Any such claim denial or
downgrade shall include the following:
1. A detailed explanation of the basis for the denial; and
2. A detailed description of the addi tional information
necessary to substantiate the claim .
D. Postpayment audits by a contracted entity shall be subject
to the following requirements:
1. Subject to paragraph 2 of this subsection, insofar as a
contracted entity conducts postpayment audits, the contracted entity
shall employ the postpayment audit process determined by the
Authority;
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2. The Authority shall establish a limit, not to exceed three
percent (3%), on the percentage of claims with respect to which
postpayment audits may be conducted by a contracted entity for
health care items and services furnished by a provider in a plan
year; and
3. The Authority shall provide for the imposition of financial
penalties under such contract in the case of any 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 contracted entities under
this paragraph, in no case less than annually.
E. A contracted entity may only apply readmission penalties
pursuant to rules promulgate d by the Oklahoma Health Care Authority
Board. The Board 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
population of the state Medicaid program covered by the contracted
entities.
SECTION 5. AMENDATORY 56 O.S. 2021, Section 4002.12, as
last amended by Section 1, Chapter 308, O.S.L. 2023 (56 O.S. Supp.
2023, Section 4002.12), is amended to read as follows:
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Section 4002.12. A. Until July 1, 2026 2027, the Oklahoma
Health Care Authority shall est ablish minimum rates of reimbursement
from contracted entities to providers who elect not to enter into
value-based payment arrangements under su bsection 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. Except as provided by subsection I of this
section, until July 1, 2026 2027, such reimbursement rates shall be
equal to or greater than:
1. For an item or service provided by a participating provider
who is in the network of the contracted entity, one hundred percent
(100%) of the reimbursement rate for the applicable service in the
applicable fee schedule of the Authority; or
2. For an item or service provided by a non-participating
provider or a provider who is not in the network of the contracted
entity, ninety percent (90 %) of the reimbursement rate for the
applicable service in the applicable fee schedule of the Authority
as of January 1, 2021.
B. A contracted entity shall offer value-based payment
arrangements to all providers in its network capable 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 contracted entity to determine reimbursement amounts to
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providers in value-based payment arrangements shall align with the
quality measures of the Authority for contracted entities.
C. Notwithstanding any other provision of this sec tion, the
Authority shall comply with paym ent methodologies required by
federal law or regulation for specific types of providers including,
but not limited to, Federally Qualified Health Cent ers, rural health
clinics, pharmacies, Indian Health Care Providers and emergency
services.
D. A contracted entity shall offer all rural health clini cs
(RHCs) contracts that reimburse RHCs using the methodolog y in place
for each specific RHC prior to Janu ary 1, 2023, including any and
all annual rate updates . The contracted entity shall comply with
all federal program rules and requirements, and the t ransformed
Medicaid delivery system shall not interfere with the program as
designed.
E. The Oklahoma Health Care Authority shall establish minimum
rates of reimbursemen t from contracted entities to Certified
Community Behavioral Health Clinic (CCBHC) pro viders who elect
alternative payment arrangements equal to the prospective payment
system rate under the M edicaid State Plan.
F. The Authority shall establish an incenti ve payment under the
Supplemental Hospital Offset Payment Program that is determined b y
value-based outcomes for providers other than hospitals.
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G. Psychologist reimbursement shall reflect ou tcomes.
Reimbursement shall not be limited to therapy and shall include but
not be limited to testing and assessment.
H. Coverage for Medicaid groun d transportation services by
licensed Oklahoma emergency medical services shall be reimbursed at
no less than the published Medicaid rates as set by the Authority .
All currently published Medicaid Healthcare Com mon Procedure Coding
System (HCPCS) codes pa id by the Authority shall continue to be paid
by the contracted entity. The contracted entity shall compl y with
all reimbursement policies established by the Authority f or 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 transp ort of a
member that is dually eligible for Medicare and Medicai d.
I. 1. The rate paid to participating pharmacy providers is
independent of subsect ion A of this section and shall be the same as
the fee-for-service rate employed by the Authority for the Medicaid
program as stated in the payment methodology at in OAC 317:30-5-78,
unless the participating pharmacy provider elects to enter into
other alternative payment agreements.
2. A pharmacy or pharmacist shall receive direct payment or
reimbursement from the Authority or contracted entity when providing
a health care service to the Medicaid member at a rate no less than
that of other health care providers for providing the same service.
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J. Notwithstanding any other provision of this section,
anesthesia shall continue to be rei mbursed equal to or greater than
the Anesthesia Fee Schedule anesthesia fee schedule established by
the Authority as of January 1, 2021. Anesthesia pro viders may also
enter into value-based payment arrangements under this section or
alternative payment arrangements for services furnished to Medicaid
members.
K. The Authority shall sp ecify in the requests for proposals a
reasonable time frame in which a contracted entity shall h ave
entered into a certain percentage, as determined by the Authority,
of value-based contracts with pr oviders.
L. Capitation rates established by the Oklahoma He alth Care
Authority and paid to contracte d entities 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 a nd 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 loc al
standards; and
2. Capitation rates shall be risk -adjusted and shall include a
portion that is at ris k for achievement of quality and outcomes
measures.
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M. The Authority may establish a symmetric risk corridor for
contracted entities.
N. The Authority shall establish a proce ss for annual recovery
of funds from, or assessment of penalties on, contracted entities
that do not meet the medical loss ratio sta ndards stipulated in
Section 4002.5 of this title.
O. 1. The Authority shall, through the financial reporting
required under subsection G of Section 4002.12b of this title,
determine the percentage of health care expenses by each contracted
entity on primary care services.
2. Not later than the end of the f ourth year of the initial
contracting period, each contracted entity shall be currently
spending not less than eleven percent (11%) o f its total health care
expenses on primary care services.
3. The Authority shall monitor the primary care spending of
each contracted entity and require each contracted entity to
maintain the level of spending on primary care ser vices stipulated
in paragraph 2 of this subsection.
SECTION 6. It being immediately necessary for the preser vation
of the public peace, health or safety, an emergenc y is hereby
declared to exist, by reason whereof this act shall take ef fect and
be in full force from and after its passage and ap proval.
59-2-3534 DC 2/22/2024 11:15:11 AM