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The Oklahoma Supreme Court on Tuesday ruled 6-3 that Oklahoma Health Care Authority overstepped its authority by outsourcing the state’s Medicaid program following passage of State Question 802.

SQ 802, which expanded Medicaid in Oklahoma, was narrowly approved by voters in June 2020.

OHCA announced late last year it would award $2.2 billion in contracts to four insurance conglomerates to run Oklahoma’s expanded Medicaid program. However, Tuesday’s court ruling struck down those deals. The court’s ruling does not overturn Medicaid expansion as approved by voters.

“In effect, the OHCA moved ahead without the required legislative authorization,” the court’s ruling reads. “This Court assumes original jurisdiction and grants declaratory relief to the Petitioners. We find the actions of the OHCA are invalid under Oklahoma law.”

Plaintiffs in the lawsuit were Oklahoma State Medical Association, Oklahoma Dental Association, Oklahoma Osteopathic Association, Oklahoma Society of Anesthesiologists and Oklahoma Chapter of American Academy of Pediatrics.

“The Supreme Court (Tuesday) agreed that the managed care contracts were awarded without legislative input and contrary to the plan approved by the voters through State Question 802,” said Lynn Means, executive director of Oklahoma Dental Association. “Medicaid expansion will provide coverage for more than 200,000 of Oklahoma’s most vulnerable citizens. The managed care plan would’ve jeopardized health care for all Oklahomans by driving out providers of general health care, as well as dentists and specialists across the state. This lawsuit was one part of a physician-led effort to ward off privatization to insurance companies and keep Oklahomans in charge of health care in Oklahoma.”

According to the Oklahoman, a spokesman for Gov. Kevin Stitt’s office said his legal team is reviewing the ruling. Stitt has pushed for a managed-care plan for Medicaid.

“Oklahoma physicians were virtually united in opposition to this plan,” said Allison LeBoeuf, executive director of Oklahoma Osteopathic Association. “Oklahomans are best served when medical decisions are made between doctor and patient, and without interference from insurance bureaucrats.”

In his dissent, Justice James Winchester said passage of Senate Bill 131, which went into law without a signature from Stitt, “recognizes a managed care model.”

“Senate Bill 131 resolves the legal question for the Oklahoma Health Care Authority to move forward,” Winchester wrote.

Much of the Republican-controlled Legislature opposed a strictly managed-care plan for Medicaid. SB 131 imposes some restrictions on the privatization proposal.

“We are pleased with the Supreme Court’s ruling, and we recognize the heart of this issue is much larger than managed care. It’s about ensuring that state agencies follow the law when spending Oklahoma’s tax dollars. (Tuesday’s) ruling represents an important victory for transparency in government and Oklahoma taxpayers,” said Mary Clarke, MD, president of the Oklahoma State Medical Association.

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