News Stories For December 1, 2017

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1 Author: Tyler Talley Date: 12/01/2017 OHCA board approves revised rate reductions (ecap) The governing board of the Oklahoma Health Care Authority (OHCA) approved a series of revised rate reductions Friday afternoon, all of which take effect early next month. The agency received a one-time appropriation of $22.8 million from the Special Cash Fund in HB1019X to lessen a series of cuts it implemented last month in anticipation of a projected $70 million hole. Those changes included a 9 percent across the board provider rate cut and a 4 percent cut to nursing facilities. Key modifications approved Friday include an across-the-board provider rate reduction of 6 percent, with exceptions to services financed through other agencies' state funding, provided under a waiver or where any reduction could severely limit access or not cover costs. The board also approved a 1 percent rate reduction for nursing facilities, both regular and acute Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IID) and nursing facilities with services for individuals diagnosed with AIDs as well as eliminating Medicare crossover coinsurance and deductible payments for nursing facilities. The 1 percent rate reductions for ICF/IIDs was met with some division earlier during State Plan Amendment Rate Committee (SPARC) meeting beforehand. The votes for both regular and acute facilities failed to receive a respective recommendation from the committee, but were still heard and approved by the board proper in the afternoon. All the approved revisions now take effect Jan. 1. The agency will now resubmit its fiscal year 2018 budget to the Office of Management and Enterprise Services to account for the changes. Vice Chair Tony Armstrong prefaced the board's votes by noting the small audience in attendance for Friday's meeting, highlighting the lack of lawmakers. Rep. Lewis Moore, R-Arcadia, was the only lawmaker present, attending a portion of the SPARC meeting in the morning and the special board meeting in the afternoon. "We have deaf ears in this state. They (lawmakers) are not listening. They may be hearing but they are not listening," Armstrong said, emphasizing OHCA could not control the "purse strings" and could not appropriate funds. "We must act on behalf of the individuals that we provide services and the providers we pay to do the best we can in allocating those resources as scarce as they are," he related, adding the board was sympathetic to all concerns shared by patients and providers. Two actions were before the board, Armstrong continued: leaving the substantially larger cuts it approved in place in November or approve the comparably smaller reductions before it Friday. The agency remains $9.5 million short of a balanced budget even with the appropriations and modified reductions however, according to OHCA CEO Becky Paternick-Ikard. "We will continue to work with leadership to try to find funding solutions that will fully fund the agency and possibly allow us to reverse these reductions," she said in a statement earlier this week. Armstrong echoed Paternick-Ikard's sentiments, expressing hope the board would soon have additional funds to offset some of the cuts. During public comment, Oklahoma Association of Health Care Providers Nico Gomez predicted the rate reductions approved Friday would become permanent much like four-day school weeks have become commonplace. "We are flirting with catastrophe and you are the only shields left to protect our citizens," Gomez told members. Page 1

2 He and Craig Jones, president of the Oklahoma Hospital Association, requested the board delay or lessen the cuts as a means to give the Legislature more time to find a long-term funding solution during the second special session or at the very least properly prepare citizens. It was also announced Friday that long-time Chair Ed McFall would not be reappointed to his position by Speaker Charles McCall, R-Atoka. McFall had been involved with the agency in some capacity since its creation in "(McFall's) absolute devotion to the agency, its staff and all the recipients of care in the state of Oklahoma we have not had a stronger advocate than Ed McFall," Armstrong told members, sharing his shock in the development. Jason Sutton, spokesman for McCall, confirmed McFall had been notified he would not be reappointed and the position currently remains vacant. Page 2

3 Author: Cynthia Reynolds Date: 12/01/2017 House committee's whistleblower hotline already receiving calls (ecap) A whistleblower hotline established by the House Special Investigation Committee already is receiving calls, Rep. Josh Cockroft, chair of the committee, said Thursday. The hotline was created for state employees to anonymously provide allegations of waste, abuse and fraud taking place in state agencies. It was made available Wednesday and as of Thursday has already received several calls, according to Cockroft, R-Tecumseh. "The whistleblower piece was something that was feedback from the committee that might be a useful tool as we begin to call different agency heads and different individuals and to testify before the committee," he said. The hotline, he continued, is an important piece because it allows individuals who might not feel comfortable naming those concerns to agency heads a safe, confidential place to do so. "We will look through all of that and figure out if there's substantial information that we can go on as we talk with the individuals," said Cockroft Cockroft said the committee's first meeting will take place sometime in the next few weeks. Speaker Charles McCall has indicated that he would like the Department of Health's budgetary issues looked over and resolved before next session, said Cockroft. "We're concerned over the misuse of $30 million in taxpayer dollars. We want answers and we feel like our constituents want answers," he said. "Before we start that whole appropriations process we want to know that taxpayer dollars are spent as they are intended to be spent and make sure that we can account and answer for every penny." The committee issued three subpoenas Thursday. Subpoenas were served to Preston Doerflinger, director of the Office of Management Enterprise Services and acting director of the Department of Health, Denise Northrup, acting director of the Office of Management and Enterprise Services, and Chris Benge, chief of staff for Gov. Mary Fallin. The three individuals are asked to provide written answers within 14 days to questions regarding: Department of Health Funds, executive efforts, other funds and accounts, legislation and agency letters concerning funds, executive and agency pay raises and disruption or discontinuance of essential services. In a press release, Cockroft says additional subpoenas are being drafted and will be delivered in the coming days. Cockroft said that while his hope is that the investigative committee finds "that nothing's wrong," there have already been some major red flags even before the committee has begun digging into the information. "I think if we get through the hearings and we understand that there are some major discrepancies, there are some processes in place that aren't effective, or just aren't being wise with the taxpayer dollars we're going to be able to reverse those to do a 180 on the inefficiencies and make them into efficiencies," said Cockroft. The hotline number is (405) Callers will provide information via voic , which can be accessed by the investigative committee. Page 3

4 Author: Shawn Ashley Date: 12/01/2017 House committee withdraws subpoenas, says officials will cooperate (ecap) Three of Gov. Mary Fallin's top advisors have agreed to cooperate with the House Special Investigation Committee looking into possible financial mismanagement at the State Department of Health, Chair Josh Cockroft said Friday evening, prompting the panel to withdraw subpoenas for the trio. "We received a response from all three individuals, and each of them offered to help us expedite the process," said Cockroft, R-Wanette. "They assured us there is no need for a subpoena and they are each willing to appear before the committee to provide answers to our questions as early as the end of next week. In exchange for their voluntary cooperation, the committee is withdrawing its subpoena at this time." Subpoenas were served Thursday to Preston Doerflinger, director of the Office of Management Enterprise Services and acting director of the Department of Health, Denise Northrup, acting director of the Office of Management and Enterprise Services, and Chris Benge, chief of staff for Gov. Mary Fallin. Cockroft said, "We are thankful for their willingness to appear by invitation, and I hope that others are willing to cooperate as well. Our belief is by starting with these three individuals we will get a broad understanding of how the agencies communicate with the Office of Management and Enterprise Services and the Governor's Office regarding the expenditure of taxpayer dollars. With this overview, we can then move forward with specific inquiries into the financial mismanagement at the Department of Health, and other agencies as needed." Fallin said in a press release, "I am pleased this matter could be resolved professionally and amicably. This will bring all of us to focus and exert our energy and attention on developing a long-term, predictable solution to fix our budget, fund core services, and provide a teacher pay raise." Fallin announced Friday she was delaying calling a second special session so that she, lawmakers and others would have more time to talk about possible budget and revenue proposals. [Editor's Note: See related story, Fallin delays announcement of second special session] Cockroft said he hopes the committee can meet with those individuals as early as next week. In addition to asking about Department of Health issues, the subpoenas asked about Fallin's line-item of veto of large portions of HB1019X, the revised fiscal year 2018 general appropriations bill. The Department of Health received $30 million of supplemental funding in HB1019X. The subpoenas asked when the veto of HB1019X was drafted and "who at the governor's office is charged with the actual drafting of the veto." The subpoenas also requested, among other things, communications regarding any rally or protest at the Capitol in the last three years and any plan or effort of any kind to influence or impact the legislature regarding any budget measure, revenue raising measure or other legislation in the last three years. Cockroft said Friday the committee is reaching out to representatives for former Commissioner of Health Terry Cline and former Deputy Commissioner of Health Julie Cox-Kain to determine their willingness to cooperate with the committee. Page 4

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6 Author: Shawn Ashley Date: 12/01/2017 Fallin delays announcement of second special session (ecap) Gov. Mary Fallin said Friday she will wait to announce the date of a second special session until she, lawmakers and others have more time to talk about possible budget and revenue proposals. "Discussions are continuing with legislative leaders, legislators and Oklahomans in all types of professions from across the state on a long-term, predictable solution to fix our budget and fund core services. Being in a state of constant crisis is hurting Oklahoma's people, its image and its brand as a state," Fallin said. "Ideas and offers of support have poured into my office. It is taking longer than anticipated to develop budget plan estimates and gauge support for various revenue proposals. That information should be available for my review in the days ahead. I'll announce very soon the start date of the second special session." Fallin said Nov. 21 she planned to announce the date of a second special session this week. She first indicated Nov. 17 she would call lawmakers back to the Capitol for a second special session when she line-item vetoed large portions of HB1019X, the revised fiscal year 2018 budget bill, just hours and after it had been passed by the Senate and sent to her desk. "We just didn't finish our job," Fallin said Nov. 21 of the special session that adjourned sine die Nov. 17. Fallin said she was prompted to line-item veto most of HB1019X after sitting in the Senate gallery that morning and watching the debate on the floor. The governor said said she was "riled up" by the debate, particularly when members said, "This is the best we can do." Fallin said, "This is not the best we can do." Fallin said the state needs to find " a predictable and sustainable path forward with its budget and budget structure." Lawmakers, meanwhile, are beginning to turn their attention to the 2018 regular session that begins Feb. 5. Five new Senate bills and one House joint resolution have been filed for the next regular session. Lawmakers have until Dec. 8 to request bills for drafting. The deadline to file bills and joint resolutions for consideration during the 2018 regular session is Jan. 18. Page 6

7 Author: Shawn Ashley Date: 12/01/2017 Agency Performance, Accountability Commission to hold first meeting (ecap) A legislatively created commission that will direct regular performance audits of some of the state's largest agencies will hold its first meeting Thursday. The Agency Performance and Accountability Commission was created with the passage of HB2311. Much like the Incentive Evaluation Commission is required to look at each tax incentive or credit every four years, the commission is charged with conducing independent comprehensive performance audits at least once every four years of the state agencies with the top 20 highest appropriations. The commission is made up of nine voting members, three appointed by the governor and three each appointed by the House Speaker and Senate President Pro Tempore. Gov. Mary Fallin's appointees include Jeffrey G. Hutson, J. Michael Adcock and Robert J. Sullivan, Jr. Senate President Pro Tempore Mike Schulz, R-Altus, appointed John O'Connor, Bob Anderson and Jay Cowart. Douglas Beall, T.C. Burgin and Tom Richards were appointed by House Speaker Charles McCall, R-Atoka. The director of the Office of Management and Enterprise Services or their designee will serve as an ex-officio, non-voting member of the commission. Schulz and McCall co-authored the legislation that created the commission. The Legislature may use the results of the performance audits to craft policies that ensure government agencies and services are provided in the most efficient and cost-effective manner, said Schulz. "Performance audits are important to help us find and eliminate waste, and ensure tax dollars are being used in the most cost-effective manner. That's important regardless of a good or bad budget year. Equally as important is the fact these audits will provide the Legislature with information on how services are delivered and whether state agencies can do things better to improve the delivery of those services to Oklahomans," Schulz said. "It's important that the Legislature take a long-term view of the cost of state government and the delivery and efficiency of state services. The Agency Performance and Accountability Commission will provide lawmakers with a lot of valuable information on state budget trends and best-practices from the private sector. All of that data will help lawmakers make more informed decisions when setting budgeting priorities." The commission is scheduled to hold its first organizational meeting Thursday in Room 412C of the Oklahoma Capitol. HB2311 creates the Agency Performance and Accountability Act and the Agency Performance and Accountability Act Commission. It provides for appointments to the commission. It requires the Legislative Services Bureau to provide staff and administrative support. It requires the commission to conduct an audit of the spending of government agencies in order to identify opportunities for savings at least once every four years. It requires the commission to issue a report on the status of implementation of these recommendations. It allows the commission to contract with a private company, nonprofit or academic institution to assist with the spending audits. It provides for bids and their acceptance. It provides for information to be collected and included in said report. Page 7