State ends HMO contracts

Friday, November 7th 2003, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ The Oklahoma Health Care Authority voted Friday to end its association with three HMOs and place all Medicaid patients under a state-run managed care program.

The action came after one HMO, Unicare, said it was losing money and would leave the state after its contract expires Dec. 31.

Under the proposal approved by the authority on a 4-1 vote, Medicaid patients will be served under a fee-for-service plan from Jan. 1 until April 1, 2004.

On that date, all of the state's 500,000 Medicaid patients would be switched to the state's SoonerCare Choice program.

Officials said there will be no reduction of service to patients during the transition.

``If a person has a Medicaid card, it will still be good at contracted clinics and doctor's offices,'' said Nico Gomez, spokesman for the health agency.

Unicare, which represents 189,000 patients in Oklahoma City, Tulsa and Lawton, said it is losing $2.7 million in 2003 and would lose $2.3 million in 2004 because the state would approve only 13 percent of its 18 percent rate increase request.

The other HMOs whose contracts are being terminated are Heartland, which has 106,000 patients in the Tulsa and Oklahoma City areas, and Prime Advantage, which serves 8,600 patients in the Lawton area.

SoonerCare Choice, the state-run program, was instituted in 1995 and serves patients in 61 counties.

The vote to terminate the HMO contracts came after Mike Fogarty, executive director of the Health Care Authority, voiced problems in getting commitments from the HMOs on future contracts.

John P. Monahan, Unicare vice president, said his company could continue to represent Oklahomans if its contract was altered to authorize small co-pay arrangements for some services.

He also said Unicare would be willing to stay in the state for two or three months if the state would compensate the company during the transition so it would not lose money.

Those suggestions, however, were not voted upon by the board.

Anne Roberts of Norman, the newest member of the health care board, cast the only vote against the plan presented by Fogarty.

Roberts said the authority was making ``a tremendous change'' and needed more input from stakeholders. She said the action ``went awfully quickly.''

``My suggestion was to hold off until next week's board meeting but that didn't happen,'' she said.

Some health care providers expressed concern that they would not get timely payments under the state-run program.

Ed McFall, chairman of the authority, said that shouldn't be a problem. He said the Oklahoma program was ``second to none'' among the states.

Eric C. Hunter, chief executive officer of Heartland, said the authority's action will put his organization ``out of business.''

Hunter said he was concerned how some ``high-risk'' patients served by Heartland will be handled under the new system.