The Oklahoma Health Care Authority. Courtesy

The Oklahoma Health Care Authority is moving forward with implementing a new law that requires it to hire a private company to conduct eligibility verification for the state’s Medicaid program, though how much it will cost the state on the front end and how the application process will change is still up in the air, state officials said.

On Friday, the Oklahoma Office of Management and Enterprise Services on behalf of the Health Care Authority issued a request for proposals for vendors to help implement the requirements of the “Act to Restore Hope, Opportunity and Prosperity for Everyone,” also known as the HOPE Act, passed by the Legislature last year and signed into law by then-Gov. Mary Fallin.

The law, authored by Representatives Terry O’Donnell, Glen Mulready (who was elected Oklahoma Insurance Commissioner in November), Sen. James Leewright and former Sen. Josh Brecheen, requires that the Oklahoma Health Care Authority hire one or more private vendors to verify information about people applying for or already receiving benefits from the state’s Medicaid program, SoonerCare, to ensure they are eligible under the program’s requirements.

The law is based on model legislation by the Florida-based conservative-leaning think tank Foundation For Government Accountability, which has also attempted to introduce the bill in other states as well, though only Oklahoma and Mississippi have thus far enacted such laws.

On average, there are about 800,000 enrollees in the SoonerCare program each month, nearly 60 percent of which are children under the age of 18, according to the OHCA. The OHCA received and processed more than 113,000 SoonerCare applications in January, about 77 percent of which were determined to be eligible for the program, according to the latest OHCA figures.

OMES, which issues bid invitations and requests for proposal on behalf of numerous state agencies, is accepting proposals until April 22, and a contract is scheduled to be awarded July 24. The plan is to be implemented Aug. 1, according to the documents issued by OMES.

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The request for proposals states that OHCA has not budgeted a set amount to implement the new requirements, that it may hire more than one vendor for the project, and that contracts will be for one year periods with six annual options to renew.

The information that the vendor would be required to verify includes an applicant’s earned and unearned income, employment status (and changes in that status), immigration status, state residency, enrollment in other state-administered assistance programs, financial resources, incarceration status, death records, enrollment status in other states’ assistance programs, and whether identify fraud may have been committed.

The law requires the vendor to continue to verify most of that information and check for changes to participants’ eligibility status on a quarterly basis once an individual is accepted to the program. It also requires applicants to answer a series of financial and personal questions to verify identity.

According to the documents in the request for proposals, the Oklahoma Health Care Authority already checks most of those eligibility requirements both during enrollment in the SoonerCare program and monitors for changes in eligibility status afterwards.

Jo Stainsby, public information director for OHCA, said the goal is to find vendors to support OHCA’s existing eligibility determination, and that final determination of eligibility is still the responsibility of the OHCA, not a private vendor.

The request for proposals also provides four categories of services the OHCA is seeking to implement the new law:

  • Data sources — providing OHCA with one or more data sources to supplement its current data sources.
  • Analytic tools — providing OHCA with software or other analytic tools to supplement its current ones.
  • Identity Authentication — providing the OHCA with an automatic process to verify an applicant’s identity, using a knowledge-based quiz.
  • Verification and business support services — provide OHCA an eligibility verification platform with an array of data sources to supplement the current process.

A clause in the law also requires that the cost of contracting with a vendor to perform the eligibility research not exceed the amount of savings generated as a result of hiring the vendor or vendors.

Because of that provision, the request for proposals states, “contract payments will be contingent on a demonstration that the provided services resulted in savings that equal or exceed payments under the contract.” The amount paid to the vendor or vendors in the first year will be set based on the proposals received, Stainsby said, and that amount would be included in distributions over the next five years after the contract is awarded.

Carly Putnam, health care policy analyst for the Oklahoma Policy Institute, a Tulsa-based left-leaning think tank, said that creates a concern that vendors may be incentivized to find ways of removing people who might be eligible for the program.

“The concern then is does this incentivize a vendor to be overly-enthusiastic in how they’re accomplishing their duties and will be they be as concerned as they should be that they might be knocking people off care who should continue to remain in Medicaid?” Putnam said. “The kinds of databases they’ll be consulting are not flawless.”

Less than six months away from the projected launch date, there are many unanswered questions about how implementing the HOPE Act will affect the SoonerCare program and what the verification process will look like once the law is implemented by OHCA.

Stainsby said because OHCA is still awaiting responses to the request for proposals, the agency is unable to say how the SoonerCare eligibility determination process would change, how the changes are projected to effect SoonerCare rolls and how much if any money is projected to actually be saved.

The Health Care Authority came under fire earlier this year after it proposed a set of rules that would have automatically dropped SoonerCare enrollees from the program if letters to the enrollee from the Health Care Authority were returned as undeliverable. At the time, OHCA officials said the rule was an attempt to enact requirements of the HOPE Act, but the Authority dropped the proposal after it elicited howls of protest from several groups and individuals who said it would likely kick eligible people off the program.

Putnam said the law was passed as a solution in search of a problem, and that Oklahoma’s Medicaid program has a relatively low amount of fraud. When it does occur, she said, it’s usually by a provider, not a recipient.

“The thing about the HOPE Act is it is designed to fix a problem that doesn’t exist,” Putnam said. “The HOPE Act operated under the theory that lots of people in Oklahoma who are on Medicaid should not be. We fundamentally know that is not true. The HOPE Act aims to fix this problem that doesn’t exist by making it much harder for people to get on Medicaid and stay on Medicaid. That’s bad news for families who need Medicaid to see a doctor or fill a prescription.”