News Release

January 14, 2010

OHCA Contact: Jo Kilgore, Public Information Manager, (405) 522-7474.

Health Care Authority Board OKs Provider Rate Reductions

OKLAHOMA CITY – The Oklahoma Health Care Authority board approved reductions of 3.25 percent to rates paid to SoonerCare providers for health care services. The cuts which were required to accommodate the agency’s reduced allocation of general revenue for December 2009 and January 2010 will go into effect April 1.

The agency’s budget reduction amounts to about $5 million in state dollars. However, each dollar the state spends in the Medicaid program is matched by $3 from the federal government. A cut of $5 million state dollars creates a total cut of $20 million when matching federal funds are taken away.

In December, the board cut about $17 million in state funds from the agency’s budget which equaled a total reduction of $69.6 million when the federal matching funds were included. The cuts involved reducing administrative costs, changes to durable medical equipment (DME) and prescription benefits, and changes in payments to providers for certain services.
“This is frustrating to say the least,” said Mike Fogarty, OHCA’s chief executive officer. “Our board and agency has been on a mission with state leaders for the past seven years to bring provider rates up to a responsible level. Three years ago, we reached that goal and we do not want to lose momentum.”

Fogarty noted that access may become an issue if provider rates are reduced as fewer providers are willing to see SoonerCare patients.

“Our program is designed to be counter-cyclical. When the economy falters and people lose their jobs and benefits or have their pay reduced, then more people qualify for our programs. We provide a safety net to help people, particularly kids, get needed health care,” he added. “Until this point, we have done all we can to protect provider rates in order to maintain access to our growing membership. However, we knew if the cuts continued that provider rates would have to be reduced."
According to recently released enrollment data, the OHCA is experiencing an enrollment surge in its two health care programs, SoonerCare and Insure Oklahoma. For the first time in history, point in time enrollment in the two programs is more than 700,000 Oklahomans, or 20 percent of the state’s population.

The agency has spent the past couple of months meeting with providers and advocates to try to determine the best ways to reduce the agency’s budget. The across-the-board provider rate cuts were the last possible option to reduce the millions required to meet the state-mandated balanced budget provision.

A copy of the board’s agenda is available at OHCA’s Web site at