In *Oklahoma State Medical Association v. Corbett*, the Supreme Court of Oklahoma addressed the Petitioners' challenge against the implementation of the SoonerSelect managed care program by the Oklahoma Health Care Authority (OHCA). The Petitioners, consisting of various medical associations, claimed that the Respondents lacked the statutory authority to implement this program, rendering their actions ultra vires. They argued that even if some authority existed, the Respondents violated the non-delegation doctrine and failed to promulgate required administrative rules, as mandated by 75 O.S. 2011. 302(D) and (E). Additionally, they contended that mandatory enrollment in SoonerSelect conflicted with Article II, Section 37(B) of the Oklahoma Constitution.
The Court assumed original jurisdiction, citing the public interest and urgency of the case. It granted declaratory relief, concluding that the Respondents lacked legal authority to implement SoonerSelect, which negated the need for a writ of mandamus for rule promulgation or a writ of prohibition against implementation. The decision effectively invalidated the actions taken by Respondents regarding the SoonerSelect program.
Participation in the Medicaid program is optional for states; however, once a state, such as Oklahoma, opts in, it must adhere to Title XIX requirements. Oklahoma's Medicaid program operates under a cooperative cost-sharing model, with federal reimbursement for medical service costs. Although federal law mandates compliance, there are waiver provisions allowing states to bypass certain requirements under specific circumstances, such as through a '1115(a) waiver' for experimental projects. Historically, Oklahoma's Medicaid operated on a fee-for-service model until significant increases in Medicaid recipients and costs prompted budgetary pressures and the need for healthcare reform. To address these issues, two committees were formed in the early 1990s, leading to the enactment of House Bill 1573, establishing the Oklahoma Health Care Authority (OHCA), and Senate Bill 765, creating the Oklahoma Medicaid Healthcare Options Act (OMHOA). These laws initiated the transition of Oklahoma's Medicaid program to a managed care system, with the OHCA designated as the agency responsible for this conversion and tasked with purchasing healthcare benefits for Medicaid recipients. The managed care model will utilize both full and partial capitation, specifically in metropolitan areas like Oklahoma City and Tulsa.
The Oklahoma Managed Health Care Organizations Act (OMHOA) established timelines for the development of managed care plans for individuals eligible under Title XIX of the federal Social Security Act. Key deadlines included: by July 1, 1995, managed care plans for at least 50% of Aid to Families with Dependent Children (AFDC) participants and noninstitutionalized medically needy individuals; by July 1, 1996, full enrollment of all AFDC participants and noninstitutionalized medically needy; by July 1, 1997, plans for aged, blind, or disabled participants; and by July 1, 1999, for institutionalized individuals and those with serious mental illness. The Oklahoma Health Care Authority (OHCA) was authorized to seek federal Medicaid waivers to implement the system.
The purpose of the legislation was to transition Oklahoma's Medicaid program from a fee-for-service model to a managed care approach, which was achieved by the mid-1990s. The OHCA developed two managed care systems: SoonerCare Plus, a fully capitated model launched on July 1, 1995, and SoonerCare Choice, a partially capitated model initiated on October 1, 1996. SoonerCare Plus was designed for urban centers and operated under a 1915(b) waiver, while SoonerCare Choice functioned statewide under an 1115(a) waiver, providing primary care management through direct contracts with providers.
By 2003, membership in SoonerCare plans exceeded 330,760, largely due to Medicaid eligibility expansion. However, an HMO withdrew from SoonerCare Plus, prompting the OHCA Board to terminate all HMO contracts by December 31, 2003, and transition all members to SoonerCare Choice. SoonerCare Plus was effectively discontinued, with members temporarily moved to an enhanced fee-for-service program before fully transferring to SoonerCare Choice by April 1, 2004.
On June 30, 2020, Oklahoma voters approved State Question Number 802 (SQ 802), which amended the state constitution to create Article XXV-A. This initiative defined 'Low Income Adults' as individuals aged 18 to 65 with incomes not exceeding 133% of the federal poverty level and mandated that the state provide Medicaid assistance to this group by July 1, 2021. The Oklahoma Health Care Authority (OHCA) was required to submit a State Plan Amendment to the Centers for Medicare and Medicaid Services (CMS) within 90 days of SQ 802's approval.
Following the approval, on July 16, 2020, the OHCA sought input for the design of the SoonerSelect managed care program, issuing Requests for Proposals (RFPs) on October 15, 2020. These RFPs aimed to establish contracts with managed care organizations (MCOs) to deliver healthcare services to approximately 773,000 Oklahomans, including the Expansion Adult Group and other vulnerable populations. The SoonerSelect plan is projected to significantly impact the state's budget, which allocated over $2.4 billion for Medicaid in 2021.
The RFPs included model contracts that were competitively bid, resulting in the selection of four MCOs on January 26, 2021, including Blue Cross and Blue Shield of Oklahoma. On February 17, 2021, three dental plans were chosen for the SoonerSelect Dental Program. These contracts require CMS approval, and enrollment in the new plans is set to begin on October 1, 2021. Additionally, on February 19, 2021, the OHCA applied for necessary waivers from CMS to implement SoonerSelect.
Petitioners argue that the current statutes do not authorize the OHCA to create this new managed care program nearly 28 years after the initial authorization. They contend that if the court finds such authorization exists, it should conduct a thorough examination of the non-delegation doctrine concerning the constitutionality of the actions taken by the Respondents.
Oklahoma's non-delegation doctrine, based on Articles IV and V of the Oklahoma Constitution, emphasizes the separation of governmental powers and mandates that legislative authority resides solely with the Legislature, which must not abdicate its duty to make fundamental policy decisions. While the Legislature cannot delegate law-making power, it can assign rule-making authority to implement its policies, provided that the statutory framework outlines clear legislative intent and standards for such delegation. The court finds that the Oklahoma Health Care Authority (OHCA) lacks legislative authorization to create the SoonerSelect program, as no express or implicit legislative grant exists. Legislative intent must be derived from a comprehensive analysis of relevant statutes, which in this case indicates that the OHCA was not granted unrestricted power to establish managed care plans. Historical context shows that the 1993 Acts were intended to transition Oklahoma's Medicaid program towards managed care, specifically through the established SoonerCare Plus and SoonerCare Choice programs, with defined procedural timelines and limitations on the OHCA’s authority to implement the system.
In 1995, the Oklahoma Attorney General opined that the Oklahoma Health Care Authority (OHCA) holds specific statutory authority to apply for waivers under federal law to modify the Medicaid program. The Respondents argue that the Legislature has broadly empowered the OHCA to establish SoonerSelect, referencing provisions from 63 O.S. 2011, 5006(A)(1, 2, 10), which outline the OHCA's responsibilities, including purchasing Medicaid benefits and entering contracts for state-purchased health care. However, the language specifies that the OHCA's power to purchase Medicaid benefits must be "specifically authorized by law." The Respondents overlook that this requirement implies the need for further legislative authorization before the OHCA can act.
The document also highlights that the Legislature has historically amended the Oklahoma Managed Health Care Authority (OMHOA) and OHCA Act to provide explicit authorizations for various actions, such as applying for waivers and developing managed care plans. Specific authorizations included a 1997 amendment allowing the OHCA to propose a Medicaid waiver for a managed care pilot program, contingent upon legislative review. Subsequent amendments in 2003 and 2016 continued to require legislative authorization for various initiatives related to health care coverage and coordination models.
Additionally, the constitutional changes introduced by SQ 802 did not grant authority for a new managed care program. Article XXV-A of the Oklahoma Constitution specifically provides medical assistance to low-income adults but does not imply authority for new managed care initiatives. Overall, the summary underscores the necessity for explicit legislative authorization for the OHCA's actions regarding Medicaid benefits and related programs.
Section 3 of article XXV-A mandates that within 90 days of its approval, the Oklahoma Health Care Authority (OHCA) must submit a State Plan Amendment to the Centers for Medicare and Medicaid Services, aiming to include Low Income Adults in Oklahoma's Medicaid program by July 1, 2021. This section allows for a waiver to provide medical assistance to Low Income Adults but does not authorize the establishment of a new managed care program.
In Treat v. Stitt, the Oklahoma Supreme Court ruled that the Governor overstepped his authority by entering into new tribal gaming compacts without legislative approval, disrupting the balance of power between the Executive and Legislative branches, resulting in the invalidation of those compacts. Justice Kauger emphasized that the Governor's authority to negotiate gaming compacts must be expressly granted by the Legislature, which had not occurred.
Further analysis of the OHCA Act and the Oklahoma Medicaid Health Options Act (OMHOA) reveals no legal authority for the OHCA to create a completely new managed care program like SoonerSelect. The court found that the OHCA's actions in issuing Requests for Proposals (RFPs) and awarding contracts for SoonerSelect were unauthorized and thus ultra vires, rendering those contracts invalid.
Additionally, the Petitioners argued that the OHCA failed to promulgate necessary rules before implementing the SoonerSelect program, violating the Administrative Procedures Act (APA). The court agreed, stating that the OHCA is obligated under the APA to establish competitive bidding rules for Medicaid contracts, and pointed out that previous managed care programs had followed this requirement with emergency rules and waiver applications.
Thirteen rules under the subchapter 'Health Plan Competitive Bid Requirements' were established in the Oklahoma Administrative Code, specifically sections 317:25-1-1 through 25-1-13. These rules outlined various aspects of the competitive bidding process, including purpose, definitions, general purchasing provisions, health plan registration, bidder list management, bid submissions, award processes, negotiation procedures, acceptable bid criteria, challenges to awards, administrative review, and confidentiality. However, all these rules were revoked on June 25, 2004, following the termination of the SoonerCare Plus program.
Subsequently, the Oklahoma Health Care Authority (OHCA) began implementing the SoonerSelect managed care program without promulgating specific rules for competitive bidding, relying instead on Requests for Proposals (RFPs) and model contracts. This approach was deemed in violation of the Administrative Procedures Act (APA), as the OHCA lacked the legislative authority to act without established rules. The court ruled that the RFP process and contracts awarded under this framework were null, void, and unenforceable.
Following the enactment of SQ 802, which initiated a new managed care program, the OHCA proceeded without the necessary legislative authorization, leading to a declaration that their actions were invalid under Oklahoma law. The court granted declaratory relief to the Petitioners, asserting that there was no need for a writ of mandamus or prohibition. Additionally, the court did not evaluate the constitutionality of the RFPs and contracts themselves. A dissenting opinion noted that Senate Bill 131, which recognizes a managed care model, provided a path for the OHCA to proceed.
Justice Rowe, joined by Vice Chief Justice Kane, dissents and suggests issuing a show cause order regarding the mootness of the matter due to S.B. 131. Justice Gurich is disqualified from the case. The excerpt references the precedent set in *Edmonson v. Pearce*, noting the Court's discretion to assume original jurisdiction when it shares concurrent jurisdiction with district courts, particularly in matters of public interest requiring urgent decisions. A writ of prohibition is described as an extraordinary remedy applicable under specific conditions, which do not pertain to this case, as it does not involve the exercise of judicial or quasi-judicial power by an administrative board or officer. The excerpt provides context regarding the Oklahoma Health Care Authority and various legislative amendments and definitions relevant to the Oklahoma Medicaid Program, including the transition to managed care and the responsibilities of the Department of Human Services and the Authority in administering Medicaid waivers.
The transition plan mandates retraining and reassignment for employees of the Department of Human Services impacted by the transfer, requiring submission to the Governor and legislative leaders by January 1, 1994. Effective July 1, 1993, a state entity will be tasked with transitioning the Oklahoma Medicaid Program to a managed care system, specifically the Oklahoma Health Care Authority (OHCA), which will also apply for necessary federal Medicaid waivers. The managed care system will utilize full and partial capitation models, with prepaid capitated health plans exclusively offered in Oklahoma City and Tulsa. The system emphasizes managed care principles, including the use of primary care physicians and a focus on preventive care. Managed care plans must be developed for various groups of Medicaid recipients by specified deadlines, including those in the Aid to Families with Dependent Children (AFDC) program and individuals categorized as aged, blind, or disabled, with full implementation required by July 1999. The designated Medicaid agency is responsible for obtaining federal waivers to facilitate this system.
Applications for federal funding under this subsection must be structured to qualify primarily on a prepaid capitated basis. Funds allocated can only be utilized for eye care, dental care, medical care, and related services for eligible individuals. This provision is grounded in legislative history, referencing amendments and statutes from 1993 through 2017, including the transition of the Health Care Finance Administration to the Centers for Medicare and Medicaid Services in 2001.
Additionally, the enactment of the "Ensuring Access to Medicaid Act" (Senate Bill 131) on May 27, 2021, without the Governor's signature, mandates that the Oklahoma Health Care Authority (OHCA) obtain legislative authorization to transition to a capitated managed-care model and necessitates rule promulgation before implementation. This Act authorizes the OHCA to require certain enrollment in managed care delivery models and establishes standards for Managed Care Organizations (MCOs) and dental benefit managers. Furthermore, it stipulates that the OHCA must seek any necessary federal approval.
The Oklahoma Health Care Authority Board is tasked with creating rules for competitive bidding for contracts under the Medicaid Program Reform Act of 2003. The Administrator of the OHCA serves as the chief executive officer and oversees a contract bidding process that promotes competition among service providers, aligns with state budgeting, and outlines conditions for contract awards. Special provisions are included for state-sponsored medical schools, allowing adjustments based on patient volume and potential supplemental payments for educational or research activities.
The document provides references to various legal statutes, opinions, and cases related to Oklahoma law, emphasizing the Health Employee and Economy Improvement Act (HEEIA) and the establishment and powers of the Oklahoma Health Care Authority. It includes citations from the Oklahoma Attorney General's opinions, multiple Oklahoma Supreme Court cases, and statutes concerning Medicaid healthcare options, public health policy, and healthcare authority administration. Key statutes cited include 56 O.S. 1010.1 (short title and purpose), 63 O.S. 5003 (comprehensive health care policy), and 75 O.S. 250.4 (compliance with acts). The excerpt also mentions the Oklahoma Judicial Center and various court programs aimed at improving legal processes and accessibility.
