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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 252 By: Standridge
AS INTRODUCED
An Act relating to the state Medicaid program;
amending Section 3, Chapter 395, O.S.L. 2022, as
amended by Section 2, Chapter 448, O.S. L. 2024 (56
O.S. Supp. 2024, Section 4002.3a), which relates to
capitated contracts; excluding prescription drug
services from certain provisions; directing certain
program delivery model for prescription drug
services; requiring certain transition, contra cts,
and reimbursement; directing amendment of specified
contracts; providing certain construction; requiring
the Oklahoma Health Care Authority to seek certain
federal approval; amending Section 4, Chapter 395,
O.S.L. 2022, as amended by Section 3, Chapte r 448,
O.S.L. 2024 (56 O.S. Supp. 2024, Section 4002.3b),
which relates to capitated contracts; conforming
language; amending 56 O.S. 2021, Section 4002.5, as
last amended by Section 1, Chapter 243, O.S.L. 2023
(56 O.S. Supp. 2024, Section 4002.5), which r elates
to contracted entity responsibilities; conforming
language; updating statutory references; amending 56
O.S. 2021, Section 4002.12, as last amended by
Section 7, Chapter 448, O.S.L. 2024 (56 O.S. Supp.
2024, Section 4002.12), which relates to minimum
rates of reimbursement; conforming language; and
providing an effective date .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY Section 3, Chapter 395, O.S.L.
2022, as amended by Section 2, Ch apter 448, O.S.L. 2024 (56 O.S.
Supp. 2024, Section 4002.3a), is amended to re ad as follows:
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Section 4002.3a. A. 1. The Oklahoma Health Care Authority
(OHCA) shall enter into capitated contracts with contracted entities
for the delivery of Medicaid serv ices as specified in the Ensuring
Access to Medicaid Act to transform the delivery system of the state
Medicaid program for the Medicaid populations listed in this
section.
2. Unless expressly authorized by the Legislature, the
Authority shall not issue a ny 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 with
contracted entities other than dental benefit managers to cover all
Medicaid services other than dental services and prescription drug
services for the following 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 the services to be covered in
the request for proposals referenced in paragraph 1 of this
subsection. Capitated con tracts referenced in this subsection shall
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cover all Medicaid services other than dental services and
prescription drug services including:
a. physical health services including, but not limited
to:
(1) primary care,
(2) inpatient and outpatient services, and
(3) emergency room services, and
b. behavioral health services , and
c. prescription drug services .
3. The Authority shall specify the services not covered in the
request for proposals referenced in paragraph 1 of this subsection.
4. Subject to the re quirements and approval of the Centers for
Medicare and Medicaid Services, the implementation of the program
shall be no later than April 1, 2024.
C. 1. The Authority shall issue a request for proposals to
enter into public-private partnerships with dent al benefit managers
to cover dental services for the following Medicaid popula tions:
a. pregnant women,
b. children,
c. parents and caretaker relatives,
d. the expansion population, and
e. members of the Children ’s Specialty Plan as provided
by subsection D of this section.
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2. The Authority shall specify the services to be covered in
the request for proposals referenced in paragraph 1 of this
subsection.
3. Subject to the requirements and approval of the Centers for
Medicare and Medicaid Services, the imp lementation of the program
shall be no later than 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 services to be covered in
the request for proposals referenced in paragraph 1 of this
subsection.
3. The contracted entity for the Children ’s Specialty Plan
shall coordinate with the dental b enefit managers who cover dental
services for its members as provided 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 April 1, 2024.
E. The Authority shall not implement the transformation of the
Medicaid delivery system until it receives written confirmation from
the Centers for Medicare and M edicaid Services that a managed care
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directed payment program utilizing averag e commercial rate
methodology for hospital 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 shall prohibit
the Authority from exploring alternative opportunities with the
Centers for Medicare and Medicai d Services to maximize the average
commercial rate benefit.
F. 1. Upon receipt of federal approval as described in
paragraph 3 of this subsection, the Authority shall cover
prescription drug services through a fee -for-service delivery model.
The Authority shall transition prescription drug coverage of all
Medicaid members covered by a contracted entity to direct coverage
by the Authority, shall enter into such contracts with pharmacists
and pharmacy providers as are necessary to ensure network adequacy
as required by federal regulation, and shall directly reimburse such
pharmacists and pharmacy providers. The Authority shall amend its
contracts with all contracted entities as necessary to implement the
provisions of this subsection.
2. Nothing in this s ubsection shall be construed to prohibit
the Authority from:
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a. implementing value-based payment arrangements with
Medicaid providers through direct contractual
agreements,
b. implementing cost-saving measures for prescription
drug services including, but not limited to,
participation in the Medicaid Drug Rebate Program, or
c. contracting with a pharmacy benefits administrator
that is located in this state to administer claims and
perform other administrative functions on behalf of
the Authority; provided, however, the Authority shall
not contract with a pharmacy benefits manager.
3. The Authority shall seek any federal approval necessary to
implement the provisions of this section.
SECTION 2. AMENDATORY Section 4, Chapter 395, O.S .L.
2022, as amended by Section 3, Chapter 448, O.S.L. 2024 (56 O.S.
Supp. 2024, Section 4002.3b), is amended to read as follows:
Section 4002.3b. A. All capitated contracts shall be the
result of requests for proposals issued by the Oklahoma Health Care
Authority and submission of competitive bids by contracted entities
pursuant to the Oklahoma Central Purchasing Act.
B. Statewide capitated contracts may be awarded to any
contracted entity including, but not limited to, any provider -led
entity or provider-owned entity, or both.
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C. The Authority shall award no less than three sta tewide
capitated contracts to provide comprehensive integrated health
services including, but not limited to, medical , and behavioral
health, and pharmacy services and no less th an two statewide
capitated contracts to provide dental coverage to Medicaid members
as specified in Section 4002.3a of this title.
D. 1. Except as specified in paragraph 3 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. Effective with the next pr ocurement cycle, and except as
specified in paragraph 3 of this subsection, at least one capitated
contract to provide statewide coverage to Medicaid members shall be
awarded to a provider -owned entity, as long as the provider -owned
entity submits a respon sive reply to the Authority ’s request for
proposals demonstrating ability to f ulfill the contract
requirements.
3. If no provider-led entity or provider -owned 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 or provider -owned entity.
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4. The Authority shall develop a scoring methodology for the
request for proposals that affo rds preferential scoring to provider -
led entities and provider -owned entities, as long as the provider -
led entity and provider -owned entity otherwise demonstrate an
ability to fulfill the contract requirements. The preferential
scoring methodology shall i nclude opportunities to award additional
points to provider-led entities and provider -owned entities based on
certain factors including, but not limited to:
a. broad provider participation in ownership and
governance structure,
b. demonstrated experience i n care coordination and care
management for Medicaid members across 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 Med icare 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
Medicare and Medicaid Services , or value-based payment
arrangements or risk-sharing arrangements in the
commercial health care market, and
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d. other relevant factors identified by the Authority.
E. The Authority may select at least one provid er-led entity or
one provider-owned entity for the urban region if:
1. The provider-led entity or provider -owned 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 or provider -owned entity
demonstrates the ability, an d agrees continually, to expand its
coverage area throughout the contract term and to develop statewide
operational 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 result
from termination of a capitated contract; provided, the total
contracting period for a capitate d 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 4002.3a of this title.
H. At the discretion of the Authority, subject to app ropriate
notice to the Legislature and the Centers for Medicare and Medicaid
Services, the Authority may approve a delay in the implementation of
one or more capitated contracts to ensure financial and operational
readiness.
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SECTION 3. AMENDATORY 56 O.S. 2021, Section 4002.5, as
last amended by Section 1, C hapter 243, O.S.L. 2023 (56 O.S. Supp.
2024, 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 administrative services.
B. Prior to the execution of a co ntract between a contracted
entity and the Oklahoma Health Care Authority, the contracted entity
shall obtain the appropriate certificate of authority issued by the
Insurance Department.
1. A contracted entity shall obtain a certificate of authority
issued by the Insurance Department to operate as a health
maintenance organization when the contracted services to be
delivered include physical health services, behavioral health
services, and prescription drug services.
2. A contracted entity shall obtain a certificate of authority
issued by the Insurance Department to operate as an a ccident and
health insurer or as a prepaid dental plan organization when the
contracted services to be delivered include dental services.
C. 1. To ensure providers have a voice in the direction and
operation of the contracted entities selected by the Oklahoma Health
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Care Authority under Section 4002.3b of this title, each contracted
entity shall have a shared governance structure that includes:
a. representatives of local Oklaho ma provider
organizations who are Medicaid providers,
b. essential community p roviders, and
c. a representative from 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.
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 committees shall be chaired or co -
chaired by a representative of a local Oklahoma provider
organization.
D. A contracted entity shall promptly notify the Authority of
all material changes affecting the delivery of care or the
administration of its program.
E. A contracted entity shall have a medical loss ratio that
meets the standards provided by 42 C.F.R., Section 438.8.
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F. A contracted entity shall provide patient data t o a provider
upon request to the extent allowed under federal or state laws,
rules or regulations including, but not limited to, the Health
Insurance Portability and Accountabili ty Act of 1996.
G. A contracted entity or a subcontractor of 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 f uture by the
contracted entity or subcontractor.
H. Nothing in this act the Ensuring Access to Medicaid Act or
in a contract between the Authority and a contracted entity shall
prohibit the contracted entity from contracting with a statewide or
regional accountable care organization.
I. Nothing in this act the Ensuring Access to Medicaid 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 withh old, fail to offer, or
make impracticable a contract with a provider on the basis of
independent practice or lack of hospital system affiliation.
K. All contracted entities shal l:
1. Use the same drug formulary, which shall be established by
the Authority; and
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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.
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 state
Medicaid program.
SECTION 4. AMENDATORY 56 O.S. 2021, Section 4002.12, as
last amended by Section 7, Chapter 448, O.S.L. 2024 (56 O.S. Supp.
2024, Section 4002.12), is amended to read as follows:
Section 4002.12. A. Until July 1, 2027, the Oklahoma Health
Care Authority shall establish minimum rates of reimbursement from
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 item s and
services furnished by such providers to enrollees of the state
Medicaid program. Except as provided by subsection I of this
section, until Until July 1, 2027, such reimbursement rates shall be
equal to or greater than:
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1. For an item or service pro vided 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 n on-participating
provider or a provider who is not in the network of the contr acted
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 me trics are met. The quality measures used
by a contracted entity to determine reimbursement amounts to
providers in value-based payment arrangements shall align with the
quality measures of the Authority for contracted entities.
C. Notwithstanding any oth er 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, I ndian Health Care Providers and emergency
services.
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D. A contracted entity sh all 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 comply 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 minim um
rates of reimbursement from contracted entities to Certified
Community Behavioral Health Clinic (CCBHC) providers who elect
alternative payment arrangements equal to the prospective payment
system rate under the Medicaid State Plan.
F. The Authority sh all 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 outcomes.
Reimbursement shall not be limi ted to therapy and shall include but
not be limited to testing and assessment.
H. Coverage for Medicaid ground 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 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
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all reimbursement policies establ ished 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. 1. The rate paid to participating pharmacy providers is
independent of subsection 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 paymen t methodology in OAC 317:30 -5-78,
unless the participating pharmacy provider e lects 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.
J. Notwithstanding any other provision of this section,
anesthesia shall continue to be reimbursed equal to o r greater than
the anesthesia fee schedule established by the Authority as of
January 1, 2021. Anesthesia providers may also enter into value -
based payment arrangements under this section or alternative payment
arrangements for services furnished to Medic aid members.
K. J. The Authority shall specify in the requests for proposals
a reasonable time frame in which a contracted entity shall have
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entered into a certain percentage, as determined by the Authority,
of value-based contracts with providers.
L. K. Capitation rates established by the Oklahoma Health Care
Authority and paid t o contracted 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 soun d 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.
M. L. The Authority may establish a symmetric risk corridor for
contracted entities.
N. M. The Authority shall es tablish 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.
O. N. 1. The Authority shall, through the financial repo rting
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.
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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 spending of
each contracted entity and require each contracted ent ity to
maintain the level of spending on primary care services stipulated
in paragraph 2 of this subsection.
SECTION 5. This act shall become effective November 1, 2025.
60-1-723 DC 12/30/2024 5:57:43 PM