Agreement Nears on OHP Transformation

May 12, 2011 – Oregon lawmakers are close to reaching agreement on the largest overhaul of the Oregon Health Plan since its inception in 1993.

Legislators on the Joint Special Committee on Health Care Transformation plan to vote on a series of changes possibly Monday before sending House Bill 3650 to Ways and Means for a cost estimate.

The hope is that by integrating physical, mental and oral health services through coordinated managed care organizations, the state could save more than $200 million in general fund dollars by the end of 2013 and diminish further cuts to human services, according to backers of the bill. Savings in future years would reportedly be greater.

Many of those who are skeptical of the cost savings in the first two years – and there are many – say doing nothing could only be worse.

Nonetheless, Gov. John Kitzhaber is taking a gamble that the plan can take shape fast and begin reaping benefits. 

Sen. Alan Bates (D-Portland), who’s been working on a deal with Oregon hospitals to increase the hospital provider tax, signaled Wednesday that payment reductions to OHP doctors could do down by 10 percent to 12 percent next year as opposed to the 19 percent originally reported.

Although no formal agreement has been announced, increasing the hospital provider tax was thought to be the only way to dampen those cuts. The tax is used to draw down additional federal funding, which is then used to provide coverage to the Oregon Health Plan Standard population -- single adults and married couples who don't have children.

Also on Wednesday, lawmakers agreed on key provisions of the legislation dealing with tort reform, a process for compelling healthcare entities to participate and details around county mental health providers.

Exactly how the structural changes to the management of the state's Medicaid program will affect physicians and their patients is a bit unclear. At a minimum, sharing information between physicians, mental health providers and dentists should be much easier, and patients should have better access to case management.

Other details, such as how companies can qualify as newly formed Coordinated Care Organizations – those managed care plans charged with administering Medicaid under transformation – and how much money they will receive in bulk payments known as global budgets, has yet to be decided.

The Oregon Health Authority will come back to lawmakers in February with those details as well as a proposal to deal with medical malpractice and the costs of defensive medicine.

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