OHCA Board approves plan for additional hospital funding

The Oklahoma Health Care Authority Board has voted to approve a plan for the disbursement of $200 million appropriated by the Legislature to OHCA for the benefit of Oklahoma hospitals. The methodology, developed in conjunction with a statewide hospital association as directed by SB32x, increases the available funds to hospitals from $200 million to over $285 million and will prioritize hospitals most at-risk.

“This methodology allows the agency to maximize the impact of the appropriated funds and continue to support Oklahoma hospitals,” said Kevin Corbett, OHCA CEO. “These health care providers contribute significantly to the stability of the entire health care system and provide critical access to care for Medicaid members. We are pleased to be able to provide substantial financial support through the investments made by state and federal partners.”

“The Board found it imperative to consider several possible scenarios for disbursement to determine the most effective use of funds,” said OHCA Board Chairman Marc Nuttle. “The OHCA team worked diligently to model different strategies that considered hospitals most at-risk and opportunities to secure additional funds. I applaud the agency’s work and dedication to optimizing the use of these dollars to keep Oklahomans healthy.”

To maximize the impact of these payments, OHCA will:

• Create a pool of $25 million disbursed to identified vulnerable hospitals. These hospitals are defined as having a negative operating margin and less than 45 days of cash on hand.

• Allocate $150 million proportionally based on total Medicaid payments, similar to the existing Supplemental Hospital Offset Payment Program (SHOPP) methodology.

The remaining $25 million will be used to draw down federal matching funds and accelerate the implementation of a new Medicaid hospital payment program based on commercial reimbursement levels, pending approval from the Centers for Medicare and Medicaid Services (CMS). This methodology allows the agency to expand the initial funding pool and distribute over $285 million to qualifying Oklahoma hospitals. “The Oklahoma Hospital Association appreciates the collaborative approach OHCA has used in developing this methodology for distributing the one-time funding appropriated by the Legislature,” said Rich Rasmussen, Oklahoma Hospital Association president & CEO. “We believe this approach addresses the concerns of hospitals as all organizations have experienced various levels of financial stress.”

Senate Bill 32x directed OHCA to create and submit a methodology for the disbursement of the $200 million in appropriated funds to the Senate Appropriations Committee Chair and the House of Representatives Appropriations and Budget Committee Chair no later than July 31, 2023.

“The Legislature recognized the staggering needs facing Oklahoma’s hospitals and prioritized making a meaningful investment,” said Senate Appropriations and Budget Chairman Roger Thompson (R-Okemah). “OHCA’s thoughtful approach utilizes federal funds to maximize the impact to both rural and urban hospitals.”

“Oklahoma hospitals are critical to the stability of our entire health care system and with this additional funding we can help ease the financial burden many hospitals are facing,” said House Appropriations and Budget Chairman Kevin Wallace (R-Wellston). “We appreciate the agency’s work in creating a plan that utilizes taxpayer dollars wisely.”

The majority of the payments will be disbursed in August 2023. The remaining payments will be disbursed in April 2024.