proses ORIGINAL IN THE SUPREME COURT OF THE STATE OF OKLAHOMA THE OKLAHOMA STATE MEDICAL ASSOCIATION; OKLAHOMA DENTAL ASSOCIATION; THE OKLAHOMA OSTEOPATHIC ASSOCIATION; THE OKLAHOMA SOCIETY OF ANESTHESIOLOGISTS, INC; and OKLAHOMA CHAPTER AMERICAN ACADEMY OF PEDIATRICS, INC. YR Wit CLERK Petitioners, v. KEVIN CORBETT, IN HIS CAPACITY AS. CHIEF EXECUTIVE OFFICER OF THE OKLAHOMA HEALTH CARE AUTHORITY and THE STATE OF OKLAHOMA ex rel. OKLAHOMA. HEALTHCARE AUTHORITY, Respondents. PETITION FOR DECLARATORY REL) FOR WRIT OF PR¢ OR, YAMUS COME NOW the Petitioners, The Oklahoma State Medical Association, Oklahoma Dental Association, The Oklahoma Osteopathic Association; The Oklahoma Society of Anesthesiologists, Ine. and Oklahoma Chapter American Academy of Pediatrics, Inc. (the Petitioners”), and in accordance with Okla. $. Ct. R. 1.191 petition this honorable Court to enter an order: i) declaring that the Oklahoma Health Care Authority's (the “Agency”) Request for Proposals Solicitation No. 8070001240 (the “Primary RFP”), Request for Proposals Solicitation No. 8070001235 (the “Dental RFP”), the Model Contracts appended thereto, and any contracts entered into or proposed to be entered into by the Agency with certain managed care organizations in connection therewith exceed the statutory authority conferred upon the 1Agency by the Oklahoma Legislature via the Oklahoma Health Care Authority Act, 63 0.S. § 5003 er seq., the Oklahoma Medicaid Healthcare Options Act,! 56 OS. § 1010.1 ef seq., or any other pertinent statutes relied upon by the Agency, as a result of these statutes’ violation of the non-delegation doctrine and are, therefore, ultra vires; ot, fi) if the Court concludes that the above-described actions of the Agency do not exceed the statutory authority conferred upon the Agency based upon the lack of an intelligible principle to guide the Agency in its implementation of such statutes, declaring that the Agency has violated the Administrative Procedures Act, and, specifically, 75 O.S. § 302(D), insofar as the Agency’s Board has failed to promulgate administrative rules to govern the Agency's implementation or expansion of the terms of the above-identified statutes through its proposed statewide Medicaid managed care program known as “SoonerSeleet” and that, as a result, the Agency’s actions implementing the Oklahoma Health Care Authority Act, 63 O.S. § 5003 et seq. the Oklahoma Medicaid Healthcare Options Act, 56 0.S. § 1010.1 ef seg., or any other pertinent statutes, including, without limitation, the RFP process as well as the award of and entry into contracts with certain managed care organizations in connection therewith, are, in accordance with 75 O.S. § 3026), null, void and unenforceable; and iii) issuing a writ of prohibition or, if necessary, mandamus, barring Mr. Kevin Corbett, in his capacity as Chief Executive Officer of the Agency, as well as the Agency itself, including those acting under the Agency’s direction or control, from further implementing the Agency's proposed managed care scheme known as SoonerSelect as reflected in the Primary RFP, Dental RFP and Model Contracts appended thereto, unless and until the Oklahoma Legislature has conferred upon the Agency the requisite statutory authority or, if the Court 1 The OMHOA is now the Oklahoma Medicaid Reform Act of 2003. 56 O.S. § 1010.1(A).deems that Oklahoma law validly confers such authority upon the Agency, until the Agency’s Board has promulgated agency rules to govern the SoonerSeleet program. ENTITLIN ETIONE! IEF SOUG! ‘THE OKLAHOMA HEALTH CARE AUTHORITY ACT 1. In connection with its efforts at Medicaid reform, in 1993, the Oklahoma Legislature passed and Governor David Walters signed into law House Bill 1573, known as the Oklahoma Health Care Authority Act (the “OHCA Act”), 63 O.S. § 5003 et seq. a The OHCA Act served as an organic statute and created a new standalone agency the Oklahoma Health Care Authority (the “Agency”), which eventually took over administration of the Medicaid program ftom the Department of Human Services. id. at § 500%(B). 3. Unlike the Department of Human Services, which, along with the Commission for Human Services, was created by the Oklahoma Constitution, see OKLA. CONST. art. 25, §§ 2-4 (repealed by State Question 765 in 2012), and possessed far greater leeway in creating policy, see OPEA v. Ola. Dept. of Central Sves., 2002 OK 71, $f 24 (“The Commission may 2 By virtue of the passage of State Question 765, DHS" constitutional authority was revoked. Sections 2 through 4 of Article 25 of the Oklahoma Constitution were repealed. In their stead, voters approved a new section of Article 25 -- OKLA. CONST. art. 25, § 6, which www.oscn.net inaccurately indicates was enacted by virtue of State Question 374 in 1956, a state question that resulted in the creation of the Department of Wildlife Conservation. In any event, absent was anything akin to the former Commission for Human Services, created by virtue of Art. 25, § 4 and which had the constitutional imprimatur to “exercise a legislative power to formulate a policy . ..” OPEA, 2002 OK at § 24. Instead, State Question 765 reflected Oklahoma voters’ intent that the Legislature, rather than individual state agencies or other members of the Executive Branch, was responsible for determining the key contours of health policy for ‘Oklahoma citizens. At the time the Agency was created in 1993, only the Department of Human Services possessed constitutional authority. The Agency, which was created not by Oklahoma’s constitution, but rather by virtue of 63 O.S. § 5006(A), does not possess such authority.exercise a legislative power to formulate a policy . ..”), the Agency was of purely legislative origin, 63 O.S. § 5006(A), and, as a result, is governed by the well-settled principle that “an agency created by statute may only exercise the powers granted by statute and cannot expand those powers by its own authority.” Marley v. Cannon, 1980 OK 147, $10. 4. With regard to that statutory authority, the OHCA Act made clear that the Agency was to serve as the sole agency responsible for “the preparation and development for converting the present delivery of the Oklahoma Medicaid Program to a managed care system.” 63 O'S. § 5009(A)[emphasis added]. 5. Certainly, the OHCA Act contemplated a “managed care” system for Oklahoma's Medicaid program. However, the devil was in the details or, more precisely, the lack thereof. The OHCA Act did not define a “managed care system,” see id. at § 5005, nor did the statute provide an intelligible principle of legislative policy sufficient to authorize the Agency to design, create, implement and administer the details of such a system. 6. The lack of valid statutory authorization is evidenced by the fact that the Legislature stated that the Agency’s purpose was simply to “purchase . .. Medicaid benefits” and otherwise to study and make recommendations for improvements to the delivery of those benefits. id. at § 5003(B)(1)-G). 7. However, insofar as the Agency’s authority to make such purchases was concerned, under the OHCA Act the Agency was confined to contracting with and paying medical providers for the “delivery” of services to Medicaid beneficiaries in accordance with the “fee for service” model already in place at the time. See id. at § 5006(A)(1)(2). The duty to administer the Medicaid program rested squarely with the Agency. Id. at § 5006(A)(7). Even in connection with those contracts, the Legislature left it completely to the Agency to “establish standards and criteria” for their participation. Id. at § 5006(A)(2). No intelligible principle to 4guide the Agency in establishing those “standards and criteria” were provided. 8. Insofar as managed care plans were concerned, whereby a third-party managed care organization administers the program in exchange for a so-called “prepaid capitated” or set amount per enrollee, the statute specifically states that the Agency is only authorized to “study the feasibility of allowing a private entity to administer all or part of the managed care system.” id. at § 5009(A)last sentence). 9) Certainly, the OHCA Act defined “health service providers” as including “health insurance carriers, pre-paid health plans, hospitals, physicians and other health care professionals, and other entities who contract with the Authority for the delivery of health care services to state and education employees and persons covered by the state Medicaid program.” Id. at § 5005(4). However, the OHCA Act only authorized the Agency to “Develop a proposed standard basic health care benefits package or packages to be offered by health services providers, for Medicaid recipients.” Jd. at § 5006(A)(3). Cf. 63 O.S. § 5006(A)(3) with 570.8. §41 (“A county may enter into contracts with private prison contractors to provide and operate jail facilities for the county”). 9. Not only did the OHCA Act at most authorize the Agency to “develop a proposed” benefits package, it: a) Provided no intelligible principle as to what the Legislature intended such “package” or “packages” to include or encompass; b) did not define which individual or entity would approve such a proposal; ©) did not identify, by reference or otherwise, the standards by which such a proposal would be assessed; 4) did not provide a definition of “health care services;” €) did not provide a definition of a “standard basic health care benefit package or 5packages”; and 1) did not differentiate between, on the one hand, health insurance carriers and so- called, albeit undefined, “pre-paid health plans” which contracted with participating providers for the actual delivery of medical care and, on the other hand, the participating providers themselves, such as hospitals, physicians and other health care professionals, ie., the ones who actually “deliver” the medical care. In so doing, the statute did not explain how a participating provider, who contracted with a managed care organization, would also offer such a “package” to Medicaid recipients. 10) 56 O'S. §§ 5019 and 5021, enacted two years later, in 1995, after the Agency had taken over administration of the Medicaid program, recognized that “qualified health plans,” a term again nowhere defined in the OHCA Act, had contracted with the Authority. While the Agency may contend that these later-enacted statutes reflect some sort of legislative approval of the Agency’s prior contracting practices, following the Agency’s termination of the failed SoonerCare Plus program as of January 1, 2004, both sections were repealed by the Legislature during the next legislative session, indicating that the Legislature no longer considered the Agency authorized to implement any sort of statewide, prepaid capitated ‘managed care program. 11) That much of the OHCA Act, which went into effect on July 1, 1995, was intended merely to authorize the Agency to prepare for the eventual assumption of the administration of the Medicaid program on January 1, 1995, 63 O.S. § 5009(B), is evident from the language of its other provisions conceming the Agency’s authority. See 63 OS. § 5006(A)(3)-(6) and (8)-(9). Little if any legislative guidance was provided by the Legislature in the OHCA Act regarding its intent as to the structure of managed care itself, 612) While the statute allowed the Agency to enlist its so-called “incidental powers,” they were only those powers necessary to carry out the statute's purposes, none of which were outsourcing the Agency's very raison détre. See 63 OS. § 5006(A)(10) and § 5003(B)(defining purpose of the Agency). 13) In sum, nowhere in the OHCA Act did the Legislature provide an intelligible principle regarding managed care in the form proposed by the Agency. Rather, the OHCA Act represented an impermissible wholesale delegation of such Legislative responsibilities to the Agency. For an intelligible principle, the Agency would have to look elsewhere. ‘THE OKLAHOMA MEDICAID HEALTHCARE OPTIONS ACT 14) Senate Bill 76, known at the time as the Oklahoma Medicaid Healthcare Options Act (the’OMHOA”),? 56 O.8. § 1010.1 ef seg., was also enacted in 1993. It identified, or at least attempted, after a fashion, to identify more specifically than the OHCA Act the Agency's authority in connection with a system of “managed care” for Okiahoma’s Medicaid program. 15) As was the case with its sister statute, the OMHOA authorized the Agency to convert the stato’s Medicaid program from the traditional “fee for serviee” system administered by the Department of Human Services to a managed eare system. 56 O.S. § 1010.3(A)(1). However, as was the case with the OHCA Act, it failed to provide definitions, guidelines or other objective criteria for the Agency to implement a system similar to the SoonerSelect program now being implemented by the Agency. 16) At the time of its enactment, 56 O.S. § 1010.1(A) defined the OMHOA’s purpose: In order to establish a coordinated approach to delivering and monitoring health care services and to ensure an efficient and appropriate level of quality health care services to eligible persons requiring such services, it is the purpose of the 3 Retitled the Oklahoma Medicaid Reform Act of 2003. $6 0.S. § 1010.1(A). 7Oklahoma Medicaid Healthcare Options Act to establish a statewide managed care system of comprehensive health care delivery through the Oklahoma Medicaid Program including, but not limited to,‘ prepaid capitated plans and primary case management plans,’ which shall be offered to ali geographic areas of the state. 17) 5604S. § 1010.2 did not define “managed care system.” 18) In any event, 56 O.S. § 1010.1(A)’s description may not serve as a basis for present agency authority as the subsection no longer exists. The Legislature deleted it in 2003 by virtue of Senate Bill 610 (effective July 1, 2003), and was replaced with language relating to other matters, 56 0.S. § 1010.1(B). 19) As for the agency’s authority, 56 OS. § 1010.3(A)(2) charged the Agency with the duty of administering a “statewide system of managed care contracts with participating providers for the provision of hospitalization, eye care, dental care and medical care coverage to members and the administration, supervision, monitoring and evaluation of such contracts. ‘The contracts for the managed care health plans shall be awarded on a competitive bid basis.” No statutory guidance was provided as to how the Agency would comply with its legislative charge to contract with participating providers while simultaneously contracting with an undefined “managed care health plan” to do the same thing, 20) As was the case with the OHCA Act, no definition was provided for either “managed care contracts” or “contracts for the managed care health plans” nor did the statute indicate whether the latter was subsumed within the former, ie., whether a “contract for the * By failing to define managed care or provide any governing principles beyond a definition of “prepaid capitated,” the Legislature also provided no basis for the Agency to use the term “including but not limited to” as grounds for expansion of its administrative authority. * Assuming the Legislature meant to reference a “primary care case management contract” the provision of such services were and are authorized by Congress by virtue of amendments to Title XIX of the Social Security Act found in the Omnibus Budget Reconciliation Act of 1981. See 42 U.S.C. § 1396d(1)(2). That sort of managed care plan, currently provided under the Ageney’s SoonerChoice program, is not at issue here. 8managed care health plan” was a form of “managed care contract” in which case the Agency could only contract with an entity meeting the definition of a “participating provider,” a definition which encompasses only actual providers of medical care. 56 0.S. § 1010.2(A\(8). See also 42 C.F.R, 400,203 (defining “provider”. 21) Equally important, at the time of its enactment, the statute was entitled the “Oklahoma Medicaid Healthcare Options Act.” In this vein, $6 0.8. § 1010.3(A)(3) made clear that the Agency was to “use both full and partial capitation models.” However, the statute provided no legislative principle with respect to making either system mandatory on a statewide basis as the Agency now intends to do with respect to the SoonerSelect program. (See e.2., Primary RFP at § 1.1.3, App. at 0023; id. at § 1.4.2, App. at 0134). THE OHCA At 1D THE OMHOA VIOLATE THE NON-DELEGATION DOCTRINE. 22) Neither the OHCA Act nor the OMHOA provide an intelligible principle of legislative policy to guide the Agency in the design, structure, implementation or administration of the proposed managed care system. In fact, the Legislature provided no definition in 56 O.S. § 1010.3(A)(2) or elsewhere of a “managed care health plan,” whether in the form of authorization or limitation, 23) To further elucidate the unintelligible nature of the principle, as it were, of the aforementioned statutes, the OHCA Act and the OMHOA were rife with no less than eleven (11) undefined terms, any one of which arguably could or could not encompass the Model Contracts at issue in this proceeding, including: a) “contracts for the delivery of state purchased health care” 63 O.S. § 5006(A)(2); b) “proposed standard basic health care benefits package” 63 O.S. § 5006(A)(3); ©) “third party payors” 63 OS. § 5006(A}(8);d) “pre-paid health plans” 63 O.S. § 5006(A)(9); ©) “qualified health plans” 63 .S, §§ 5019 and 5021 (repealed); f) “health benefit plans” 63 O.S. § 5021(D\(4)(repealed); g) “managed care contracts” 56 O.S. § 1010.3(A\2); h) “managed care health plans,” 56 O.S. § 1010.3(A)(2); i) “prepaid capitated health plans,” 56 O.S. § 1013.3(A)(3); j) “managed care plans,” 56 O.S. § 1010,3(C); and a k) “managed care health services contract.” 56 0.8. § 1010.2(A)(6). 24) The results of the absence of such an intelligible principle is evident in the nature of the current statutory framework. For example, 63 O.S. § 5006(A)(9) charged the Agency with the duty to “Collaborate with and assist the State Department of Health with the development of licensure standards and criteria for pre-paid health plans.” At the time the OHCA Act and the OMHOA were enacted in 1993, the Oklahoma State Department of Health. bore responsibility for, among other things, licensure of health maintenance organizations or “HMOs.” See 63 O.S. §§ 2503(7)(a), 2508 and 2511 and 2521 et seq. (repealed in 2003). See also OAC § 310:655-1-1 et seq. (revoked) and § 310:656-1-1 et seq, (revoked). Licensure of HMOs is now the responsibility of the Insurance Commissioner, 36 O.S. § 6903, although the Oklahoma Department of Health must still verify compliance with certain quality assurance standards. See 63 OS. § 1-105e(A)(2) and 36 OS. §§ 6904(A)(2) and 6907 and OAC § 310:659-1-1 ef seg. 25) 63 O.S. § 5006(A)(9) has never been amended to account for this fact or to authorize or direct the Ageney to collaborate with and assist the Insurance Commissioner. Pursuant to 36 O.S, § 6923, the Insurance Commissioner is authorized to promulgate rules concerning HMOs, and, in fact, licensed HMOs are authorized to operate under the Medicaid 10program. Id at §§ 6918 and 6934. The Legislature has deemed HMOs that solely provide services under the Medicaid program exempt from certain statutory requirements. Jd. at § 6903.1. See also OAC 365:40-1-3. However, there is neither statutory authority for nor any indication that the Agency has coordinated with the Insurance Commissioner to develop specific “licensure standards and criteria” for “pre-paid health plans” that are to be part of the ‘SoonerSelect Medicaid program. Cf OAC 365:40-5-40 et seq. 26) There are critical policy questions for the Legislature to address in an intelligible ‘manner. Given that the Legislature charged the Agency with the duty to “collaborate and assist” in the licensing standards and criteria of “pre-paid health plans” in the Medicaid program specifically, 63 O.S. § 5006(A)(9), what principles did the Legislature actually intend the Agency to follow with respect to that duty and what is the Agency to do now that the Insurance Commissioner possesses the authority previously exercised by the Department of Health? 27) Given that the title of the OMHOA Act was originally the “Oklahoma Medicaid Healtheare Options Act,” and required “both full and partial capitation models,” what did the Legislature intend with regard to making enrollment in either system mandatory, as opposed to allowing enrollees a choice? This is unintelligible based on language in the OHCA Act. Cf. 56 OS. § 1010.2(A\3)(“The System shall use both full and partial capitation models . ..”) with 63 O.S. § 5009(A)(1)(“The System shall emphasize . . . Managed care principles, including a capitated, prepaid system with either full or partial capitation”), 28) Given 63 OS. § 5008(B)(5) and 56 O.S. § 1010.4(F) and (G), what did the Legislature intend with respect to competitive bidding for Medicaid plans in particular that led itto disavow the methods of the Central Purchasing Act in connection with the bidding process? 29) ‘The Legislature provided the Agency with no intelligible principle to assess and answer these or many other critical questions concerning the Agency’s proposed outsourcing 11of the administration of the lion’s share of Oklahoma’s Medicaid program. Cf Tulsa Co, F.OP., Lodge No. 188 v. Bd. of County Commr’s, 2000 OK 2, 4 11 (describing the “extensive guidelines” in the governing statutes which allowed for the so-called “privatization” of county jails). For purposes of the non-delegation doctrine and the Legislature's authorization to utilize billions of dollars in state taxpayer money, it is no answer to simply say that the Ageney attempted merely to conform with federal Medicaid law. City of Okla. City v. State ex rel. Okla. Dept. of Labor, 1995 OK 107. There must still be authorization under state law and there must be intelligible principles in the operative statutes in connection with the Agency's authorization to transfer billions of Oklahoma taxpayers’ dollars each year. 30) As a result of the fact that the Legislature did not provide any principle, intelligible or otherwise for these critical policy questions, the OHCA Act and OMHOA violate the non-delegation doctrine. See Dem. Party of Okla. v. Estep, 1982. OK 106 at n.25 (“No ‘matter how laudable a piece of legislation may be in the minds of its sponsors, objective guidelines or standards should appear expressly in the act”). See also In re: Initiative Petition ‘No. 366, 2002 OK 21, §9 16-18 (holding that initiative petition that omitted key information violated the doctrine). ‘THE AGENCY'S PRIOR FAILED EXPERIMENT WITH PREPAID CAPITATED MANAGED CARE 31) Following the enactment of the above-described statutes, the Agency implemented what appears to have been a prepaid, capitated managed care system known as “SoonerCare Plus,” whereby the Agency contracted with various organizations for the administration of managed care in Oklahoma City, Tulsa, and Lawton. The system ended in failure on December 31, 2003. 32) While the Agency may point to an experiment that ended more than 18 years 12ago as justification for its present actions, two wrongs do not make a right. The United States Supreme Court recently held in an analogous context, “Nor may a court favor contemporaneous or later practices instead of the laws Congress passed.” McGirt v. Oklahoma, 140 S. Ct. 2452, 2468 (2020). Reliance upon agency practice to interpret the terms and scope of the OHCA Act and the OMHOA would result in what the McGirt court referred to derisively as “substituting stories forstatutes.” Id. at 2470. As this Court has made clear, the language of an unambiguous statute controls the Agency’s authority, not the Agency’s own expansive view of that authority, See Sholer v. State ex rel. Dept. of Pub. Safety, 1995 OK 150, quoting Fink v. State ex rel. Dept. of Pub, Safety, 192 OK CLV APP 169 ("Great deference to an agency's construction, however, does not require that it be allowed to misapply a statute that, as the Fink court observed, was ‘not ambiguous and does not require construction.” 33) In fact, the Agency cannot rely upon its prior interpretations of the OHCA and OMHOA in connection with a similar program because it repealed the rules governing the program 17 years ago, thus indicating, if anything, that the Agency also believed its statutory authority had expired upon the demise of the Soonereare Plus program as of January 1, 2004. See OAC 317:25-5-1 through 3 and 317:25-5-40(a)(repealed in 2004 but found at 13 Okla. Reg. Vol. 13, No. 14 at 1635-40 (May 15, 1996)).* Otherwise, it would have had no reason to repeal them. 34) In fact, in OAC 317:25-5-1 through 3 and 317:25-5-40(a), which were repealed uupon termination of the SoonerCare Plus program in 2004, the Agency chose to limit plans in that program to the definition of health maintenance organizations in 63 O.S. § 2503(1) 6 Available online at: hutps://digitalprairie.ok.gov/digital/collection/p16807coll3/id/48886/rec/821 13,(repealed in 2003)(an organization that “provides, either direetly or through arrangements with others, comprehensive health services”) as well as so-called “public managed care plans.” See 13 Okla, Reg. Vol. 13, No. 14 at 1635-40 (May 15, 1996). Section 1.3.1 of the Model Contract changed this definition to eliminate “public managed care plans” but to include insurance companies. (Primary RFP Model Contact, App. at 0124). No rulemaking by the Agency occurred in connection therewith. The malleable nature of the Agency’s notion of even the very entities with which it may contract reflects the absence of an intelligible principle sufficient to guide the Agency and a failure on the part of the Agency to comply with its duties under 63 OS. § 5006(A)(9). ‘THE STATUTORY DEADLINES FOR IMPLEMENTATION OF A MANAGED CARE PROGRAM EXPIRED ALMOST A QUARTE 'URY AGO 35) ‘The SoonerSelect program, even if it somehow fell within the scope of 56 O.S. § 1010.3(A)(2), would also come a quarter-century after the deadlines for implementation set forth in 56 O.S. § 1010.3(C), such deadlines further reflecting that the Legislature did not intend the OMHOA as an open-ended authorization for the Agency to do as it wished well into the following millennium, For example, 56 O.S. § 1010.3(C)(2) and (3) required the development of undefined “managed care plans” for the aged, blind and disabled and institutionalized individuals by July 1, 1999 and July 1, 2001 respectively. Subsequent attempts at reanimating authorization in some form for these groups have necessitated fresh statutory enactments prior to the Agency's request for proposal process. See 63 0.8. § 5028. The aged, blind and disabled are excluded from SoonerSelect in any event. See Model Contract at § 1.4.5 (last sentence) (App. at 0135). uwTHE AGENCY HAS NOT CREATED COMPETETIVE BIDDING RULES SPECIFIC TO THE MANAGED CARE PROGRAM 36) 56 OS. § 1010.4(G)(1) mandated that the Agency’s Board was to promulgate rules “Establishing appropriate competitive bidding criteria and procedures for contracts awarded,” see also 63 O.S. § 5008(B)(5). Besides the fact that the Legislature provided no intelligible principle as to what it considered “appropriate,” the Agency’s rules merely say that any purchases of goods or services will be in accordance with “the Oklahoma Central Purchasing Act, 74 Okla. Stat. §§ 85.1 et seq., other applicable statutory provisions, Office of ‘Management and Enterprise Services Central Purchasing Rules and the Authority's approved internal purchasing procedures.” OAC 317:10-1-3(a). However, 56 0.8. § 1010.4(F) states that “Contracts for managed health care plans, authorized pursuant to paragraph 2 of subsection A of Section 1010.3 of this title and necessary to implement the System, and other contracts entered into prior to July 1, 1996, shal! not be subject to the provisions of the Oklahoma Central Purchasing Act.” Instead, the Agency was to formulate rules specific to the nature of the ‘managed care system implemented, something it in fact did with regard to the SoonerChoiee program, but which rules have also been revoked. See OAC 317:25-1-1 through 317:25-1-13 (repealed in 2004). ‘THE AGENCY HAS PROCEEDED WITH IMPLEMENTATION OF THE OHCA AND OMHOA VIA THE SOONERSELECT PROGRAM WITHOUT PROMULGATING AGENCY RULES AND, UPON SO DOING, WILL VIOLATE THE OKLAHOMA CONSTITUTION 37) In the event the Court were to find that the Agency has sufficient statutory authorization or that the statutes otherwise contain a sufficiently intelligible principle to guide the Agency and thus satisfy the non-delegation doctrine, the Agency's Board has still failed to promulgate rules and thereby violated Oklahoma’s Administrative Procedures Act and, specifically, 75 O.S. § 302(D), rendering the actions undertaken, including the entry into any 15contracts for the provision of managed care by any entity, null, void and unenforceable pursuant 10 75 OS. § 302(B). 38) Section 302(D) of the Administrative Procedure Act states: ‘An agency shall not by intemal policy, memorandum, or other form of action not otherwise authorized by the Administrative Procedures Act: 1. amend, interpret, implement, or repeal a statute or a rule; 2. expand upon ox limit a statute or a rule . 39) Inaddition, “Any agency memorandum, internal policy, or other form of action violative of this section or the spirit thereof is null, void, and unenforceable.” Jd. at § 302(E). 40) While the OHCA may contend that the Court should not exercise its discretion to assume original jurisdiction on the grounds that rulemaking would be premature given the ongoing “readiness review” for winning bidders, the need for contract approval by federal agencies,’ and the fact that it plans to seek an amendment to its Section 1115(a)* waiver from the Centers for Medicare and Medicaid Services, none of these contentions is sufficient to prevent relief. See 1995 OK AG 62, J 16 (“The process of applying for federal waivers is separate and apart from implementing a managed care program. It is the implementation of the program that requires the promulgation of rules under the OAPA”). 41) — Moreover, whatever practical justification is offered by the Agency, waiting to promulgate rules to govern the program retroactively is no solution as the Legislature has not expressly authorized retroactive rulemaking by the Agency’s Board, See Bowen v. Georgetown Univ. Hospital, 488 U.S, 204, 208 (1988) (“[A] statutory grant of legislative rulemaking authority will not, as a general matter, be understood to encompass the power to promulgate retroactive rules unless that power is conveyed by Congress in express terms”) [emphasis added]. See also Hem v. 7 See e.g, 42 CER. §§ 438.3, 438.4 and 438.7. ¥ See 42 US.C. § 1315(a). 16Maurer, 458 F.3d 1185 (10 Cir. 2006); Heiman v, Atlantic Richfield Co., 1995 OK 19 at n.2. 42) The proposed Model Contract, while allowing for amendments to its terms after execution based on subsequent amendments to state “rules,” makes clear that those rules only include those “governing health insurers and the practice of health care professions or related requirements.” Model Contract at § 1.1.24. (Primary RFP Model Contract, App. at 0120). No mention is made of rules governing the managed care system itself. The Agency knows how to promulgate rules. See OAC 317:25-5-1 (repealed rules governing failed SoonerCare Plus managed care program). It has not done so. 43) The absence of duly promulgated rules also likely impedes the Legislature's ability, in the exercise of its police power, to take matters into its own hands and retroactively ‘modify the Agency's obligations under such contracts as a result of the contract clause of the United States Constitution. See generally, United States Trust Co. of New York v. New Jersey, 431 U.S. 1 (1977). IF A RULE REQUIRING MANDATORY ENROLLMENT WITH A HEALTH INSURER IS PROMULGATED AS A CONDITION OF RECEIVING MEDICAID BENEFITS, IT WILL VIOLATE THE OKLAHOMA CONSTITUTION 44) In addition, once rules are implemented, the Agency’s decision to use a mandatory enrollment scheme in which participants are penalized? in the form of the loss of statutory benefits for not participating with health insurance companies will violate OKLA. ConsT. art. 2, § 37(B\(1). ‘That provision states “A law or rule shall not compel, directly or indirectly, any person, employer or health care provider to participate in any health care system.” A “health care system” is defined as “any public'” or private entity whose function or ° The provision does not define a \penalty.” However, “(a] ‘penalty’ is defined as “an exaction imposed by statute as punishment for an unlawful act." Green Solution Retail, Inc. v. United States, 855 F.3d 1111, 1121 (10 Cir. 2017), citing United States v. La Franca, 282 US. 568, 572 (1931). '© The Agency may claim the use of the word “public” implicates and would invalidate the 17purpose is the management of, processing of, enrollment of individuals for or payment for, in full or in part, health care services or health care data or health care information for its participants.” Jd, at § 37(A)(3). 45) While the Agency may complain that this constitutional provision was enacted in connection with the Affordable Care Act's so-called “individual mandate” and that mandate was upheld as a valid exercise of Congress’ taxing power in National Fed. of Ind. Business v. Sebelius, 567 U.S. 519 (2012), Congress has not mandated the enrollment at issue here but rather left the question of mandatory enrollment up to the states. See e.g., 42 U.S.C. § 1396u- 2(a)(1(A)(). While Sebelius may have by implication preempted OKLA. CONST. art. 2, § 37(B)(1) in connection with the ACA, it did not otherwise invalidate it, By choosing to contract with health insurance companies, the Agency has placed its mandatory managed care scheme squarely in the crosshairs of Section 37(B)(1). CONCLUSION For the reasons set forth above and in the accompanying Brief, Petitioners respectfully request that the Court enter an order: i) declaring that the Oklahoma Health Care Authority's (the “Agency") Request for Proposals Solicitation No. 8070001240 (the “Primary RFP”), Request for Proposals Solicitation No. 8070001235 (the “Dental RFP”), the Model Contracts appended thereto, and any contracts entered into or proposed to be entered into by the Ageney with certain managed care organizations in connection therewith exceed the statutory authority conferred upon the Agency by the Oklahoma Legislature via the Oklahoma Health Care Authority Act, 63 O.S. § Agency’s own administration of the current SoonerChoice program. However, the mandatory enrollment rule of the SoonerChoice program was in place prior to January 1, 2010 and thus that program is unaffected by Section 37(B\(I). See id. at § 37(D\(4) and OAC 317:25-7-12 185003 et seq., the Oklahoma Medicaid Healthcare Options Act, 56 0.8. § 1010.1 et seq., or any other pertinent statutes relied upon by the Agency, as a result of these statutes’ violation of the non-delegation doctrine and are, therefore, ultra vires; or, ii) if the Court concludes that the above-described actions of the Agency do not exceed the statutory authority conferred upon the Agency based upon an intelligible principle to guide the Agency in its implementation of such statutes, declaring that the Agency has violated the Administrative Procedures Act, and, specifically, 75 0.8. § 302(D), insofar as the s Board has failed to promulgate administrative rules to govern the Agency’s Agency implementation or expansion of the terms of the above-identified statutes through its proposed statewide Medicaid managed care program known as “SoonerSelect” and that, as a result, the ‘Agency's actions implementing the Oklahoma Health Care Authority Act, 63 OS. § 5003 et seq,, the Oklahoma Medicaid Healthcare Options Act, 56 O.S. § 1010.1 et seq., or any other pertinent statutes, including, without limitation, the RFP process as well as the award of and entry into contracts with certain managed care organizations in connection therewith, are, in accordance with 75 0.8. § 302(E), null, void and unenforceable; and iii) issuing a writ of prohibition or, if necessary, mandamus, barring Mr. Kevin Corbett, in his capacity as Chief Executive Officer of the Agency, as well as the Agency itselE, including those acting under the Agency’s direction or control, from further implementing the Agency's proposed managed care scheme known as SoonerSelect as reflected in the Primary RFP, Dental RFP and Model Contracts appended thereto, unless and until the Oklahoma Legislature has conferred upon the Agency the requisite statutory authority or, if the Court deems that Oklahoma law validly confers such authority upon the Agency, until the Agency’s Board has promulgated rules to govern the SoonerSelect program. 19kw FIRM, PLLC Robinson Ave., Suite 630 Oklahoma City, OK 73102 Telephone: (405) 602-1591 Facsimile: (405) 602-1754 Email: john@stinerlaw.com eee Mlb) Sh — “Anthgfly W, Sykes, OBA #18853 Attomey at Law 400 Fawn Brook Drive Duncan, OK 73533-6010 Telephone: (405) 473-5430 E-mail: anthony wsvkes/@gmail.com Attomeys for Petitioners CERTIFICATE OF SERVICE |. certify that a true and correct copy of the above and foregoing Petition was mailed this Ifith day of February 2021, via certified-mail, return receipt requested, delivery restricted to addressee, with postage prepaid thereon, to: Kevin Corbett 4345 N. Lincoln Blvd, ‘Oklahoma City, OK 73105 Oklahoma Health Care Authority 4345 N. Lincoln Blvd Oklahoma City, OK 73105 Oklahoma Attomey General 313 N.E. 21" St. Oklahoma City, OK 73105 20