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SENATE FLOOR VERSION
February 24, 2025
AS AMENDED
SENATE BILL NO. 875 By: Rosino of the Senate
and
Stinson of the House
[ state Medicaid program - capitated contracts -
minimum expense requirement - minimum rates of
reimbursement - effective date -
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 a mended 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 P urchasing 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.
C. The Authority shall award no less than three statewide
capitated contracts to provide comprehensive integrated health
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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 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 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 responsive reply to the Authority ’s request for
proposals demonstrating ability 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
demonstrating ability to fulfill the contract requirements, the
Authority shall not be required to contract for statewide covera ge
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 -
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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 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, b ut 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 Med icare
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
d. other relevant factors identified by the Authority.
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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 ability, and agrees continually, to expa nd 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 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 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 Medicaid
Services, the Authority may ap prove a delay in the implementation of
one or more capitated contracts to ensure financial and operational
readiness.
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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 subsection O of Section 4002.12 of thi s
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, t he 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 f or 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 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
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2. For an item or service pr ovided 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
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 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 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 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
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Medicaid delivery system shall not interfere with the program as
designed.
E. The Oklahoma Health Care Authority shall es tablish 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 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 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 shall comply with
all reimbursement po licies established 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.
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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 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 reimburs ed 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 payment
arrangements for services furni shed 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 provide rs.
L. Capitation rates established by the Oklahoma Health Care
Authority and paid to 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 actuarial ly sound as
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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. The Authority may establish a symmetric risk corridor for
contracted entities.
N. The Authority shall e stablish 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 Authority shall, through the financial report ing
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 the initial
contracting period, each co ntracted 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 entit y to
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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 en tity 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.
COMMITTEE REPORT BY: COMMITTEE ON HEALTH AND HUMAN SERVICES
February 24, 2025 - DO PASS AS AMENDED