Oklahoma Sits Out New Obamacare Grants

Jul 31, 2014

Note (Aug. 21, 2014): Oklahoma Watch has published a major correction to the following story. Further reporting confirmed that Gov. Mary Fallin did apply to participate in the Affordable Care Act grant program titled "State Innovation Models." Oklahoma Watch sincerely regrets the error. Please read the corrected story at this link.

Three years after turning down a $54 million federal grant to set up an Affordable Care Act demonstration project, the state of Oklahoma has declined to participate in another big “Obamacare” grant program.

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Yet the Oklahoma State Department of Health did choose recently to participate as a partner in a separate Medicaid grant application headed by a Tulsa health-care organization. That application was rejected by the Obama administration.

Although the two actions appear somewhat contradictory, the bottom line is the same: Oklahoma will remain on the sidelines as Washington hands out money to states and health-care groups that apply to participate in Affordable Care Act grant programs.

The latest developments represent another twist and turn in a testy three-year relationship between the Obama administration and Gov. Mary Fallin and the Oklahoma Legislature over provisions of the 2010 Affordable Care Act.

"Every month we learn a new lesson about why the state of Oklahoma should stay as far away from Obamacare as possible,” Fallin told Oklahoma Watch in a written statement. “The law has cost millions of people their health insurance, is failing to bend the cost curve for medical care, and is constantly in danger of being thrown out by courts for being constitutionally suspect.” 

Before Fallin took office in early 2011, the Brad Henry administration had applied for a $54 million “Early Innovators” grant to develop the information technology infrastructure needed to create a state-based health insurance exchange.

In February 2011, Fallin and legislative leaders announced that the state had received the grant and planned to proceed with it. A bill authorizing the project was approved by the House. But it stalled in the Senate, and state leaders announced in April 2011 that they had decided to reject the grant.

Fallin and legislative leaders said at the time they intended to enact a state-run “Health Insurance Private Enterprise Network” to prevent the establishment of a federal health exchange in Oklahoma. That never happened.

In 2013, when the U.S. Department of Health and Human Services solicited applications for a new program called the “State Innovation Models Initiative,” Oklahoma declined to participate in the first round of grant awards totaling $250 million. The purpose of the program was to design and test innovative approaches to improve care and lower health costs at the state level.

Oklahoma did the same thing this year when the federal department announced a second round of funding under the initiative. The application deadline for the $730 million second-round funding pool was July 21.

“The state of Oklahoma did not apply for Round Two,” Fallin Press Secretary Michael McNutt said in an email. The governor’s office did not elaborate on its decision.

Washington plans to fund programs in up to 15 states. The recipients have not yet been chosen.

"Applying for the second round of State Innovation Models grants potentially ties the state to a federal program that our people don't want, and that has been incompetently conceived and implemented,” Fallin said. “We are focused on finding Oklahoma-based solutions to Oklahoma health problems.”

The Oklahoma State Department of Health, however, was a participant in yet another Obamacare grant program called the “Health Care Innovation Awards.”

Earlier this year, the Tulsa-based MyHealth Access Network submitted an application to participate in the Health Care Innovations Awards, a $360 million program designed to stimulate development of innovative health-care systems across the country.

MyHealth Access was the lead partner in a coalition that included the state Health Department, Integris Health, Blue Cross Blue Shield of Oklahoma and the Choctaw Nation of Oklahoma.

Earlier this month, HHS announced its tentative selection of 39 recipients in 27 states to receive the second round of funding under the grant program. The Oklahoma coalition was not among them.

“There are a bunch of different grant programs there,” said Dr. David Kendrick, CEO of MyHealth Access. “You throw your hat in the ring and see, put your best foot forward and hope you understand how they’re making their selections. The way these competitive grants work is you apply for many and get a few.”

Health Department spokeswoman Leslea Bennett-Webb said in an email the state agency was disappointed that the Oklahoma application was rejected.

“We were enthused about this grant opportunity because it would have provided the state with resources to better coordinate population health and health-care efforts, ultimately yielding health outcome improvements across the state,” Bennett-Webb said.


Warren Vieth can be reached at

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