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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 875 By: Rosino
AS INTRODUCED
An Act relating to the state Medicaid program;
amending 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), which relates to
capitated contracts; making contracted entities
ineligible for capitated contracts for failure to
meet certain minimum expense requirement; amending 56
O.S. 2021, Section 4002.12, as last amende d by
Section 7, Chapter 448, O.S.L. 2024 (56 O.S. Supp.
2024, Section 4002.12) , which relates to minimum
rates of reimbursement; making contracted entities
ineligible for capitated contracts for failure to
meet certain minimum expense requirement ; providing
an effective date; and declaring an emergency .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. 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 entiti es
pursuant to the Oklahoma Central Purchasing Act.
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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.
C. The Authority shall award no less th an three statewide
capitated contracts to provide comprehensive integrated hea lth
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 Med icaid 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 procurement cycle, and except as
specified in paragraph 3 of this subsec tion, 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 responsive reply to the Authority ’s request for
proposals demonstrating abil ity to fulfill the contract
requirements.
3. If no provider-led entity or provider-owned entity submits a
responsive reply to the Authority ’s request for proposals
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demonstrating ability to fulfill the contract requirements, the
Authority shall not be requ ired to contract for statewide coverage
with a provider-led entity or provider -owned entity.
4. The Authority shall develop a scoring methodology for the
request for proposals that affords preferential scoring to provider -
led entities and provider -owned entities, as long as the provider -
led entity and provider -owned entity otherwis e demonstrate an
ability to fulfill the contract requirements. The preferential
scoring methodology shall include 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 in 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 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
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Medicare and Medicaid Services, or 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 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 abi lity, and agrees continually, to expand its
coverage area throughout the contr act 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, c apitated 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 capitated contract shall not exceed seven
(7) years.
G. At the end of the con tracting period, the Authority shall
solicit and award new contracts as provid ed by this section and
Section 4002.3a of this title.
H. At the discretion of the Authority, subject to appropriate
notice to the Legislature and the Centers for Medicare and Me dicaid
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Services, the Authority may approve a delay in the implementation of
one or more capitated contracts to ensure financial and operational
readiness.
I. Effective with the next procurement cycle, a contracted
entity that currently holds a capitated contract with the Authority
under the Ensuring Access to Medicaid Act shall be ineligible for a
capitated contract award for the subsequent procurement cycle if the
contracted entity fails to meet the minimum primary care expense
requirement stipulated in s ubsection O of Section 4002.12 of this
title.
SECTION 2. 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 e stablish 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 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, 2027, such reimbursement rates shall be equal
to or greater than:
1. For an item or service provided by a participating pro vider
who is in the network of the contracted entity, one hundred percent
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(100%) of the reimbursement rate for the applicable service in the
applicable fee schedule of the Author ity; 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 Au thority
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 b e tied to reimbursement
incentives when quality metrics 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 fo r 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 H ealth Centers, rural health
clinics, pharmacies, Indian Health Care Providers and emergency
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 pri or to January 1, 2023, including any and
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all annual rate updates. The contrac ted 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 minimum
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 shall establish an incentive p ayment 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 limited 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 s hall comply with
all reimbursement policies established by the Authority for the
ambulance providers. Contracted entities shall accept the modifiers
established by the Centers for Medicare and Medicaid Services
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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 Authorit y for the Medicaid
program as stated in the payment methodology 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.
J. Notwithstanding any other provision of this section,
anesthesia shall continue to be reimbursed equal to or 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 pa yment
arrangements for services furnished to Medicaid members.
K. 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 the Authority,
of value-based contracts with providers.
L. Capitation rates established by the Oklahoma Health Care
Authority and paid to contracted entities under capitated contracts
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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 con sistent 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. The Authority may establish a symmetric risk corridor for
contracted entities.
N. 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.
O. 1. The Authorit y 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 fourth year of th e 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.
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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 services stipulated
in paragraph 2 of this subsection.
4. If a contracted entity fails to meet the minimum primary
care expense requirement stipulated in paragraph 2 of this
subsection, the contracted entity shall be ineligible for a
capitated contract award for the subsequent procurement cycle as
provided by subsection I of Section 4002.3b of this title.
SECTION 3. This act shall become effective July 1, 2025.
SECTION 4. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
60-1-772 DC 1/16/2025 10:03:15 AM