Pediatricians Terminate CareOregon Contract

April 29, 2010 -- The majority of pediatricians in the Portland metropolitan area have decided to drop their affiliation with CareOregon, which could impact 15,000 children enrolled in the Oregon Health Plan.

 

Their seven-year partnership ends June 30 because of differences over money and care management.

 

The 110-member pediatric group, known as the Children’s Health Alliance, has signed a contract with FamilyCare, a Medicaid managed-care plan.   

 

“We feel that FamilyCare is a better partner for primary care doctors because they work more closely and collaboratively in care management,” said Sharon Fox, the alliance’s executive director.

 

Reimbursement was a big sticking point. The pediatricians felt they should have been able to share in the profit-sharing revenue generated by CareOregon, which has $140 million in reserves. But its executives insist such high reserves are necessary to keep their health plan afloat.

 

“I know the alliance wanted more money,” said Pam Mariea-Nason, director of health policy and community engagement at CareOregon. “We’re all disappointed we couldn’t come to an agreement and that our long-term relationship had to end this way. But if we have to pay a lot more for one particular group of doctors, it sets up an unfair balance and drives up the cost of the program, which is supported by tax dollars.”

 

 In 2002, CareOregon hit a cliff and almost collapsed because its reserves were too low.  “We realized loud and clear that we had to set up our own rainy day fund,” she said.  “We’re responsible for reserving at a level we feel is appropriate. If we have a bad year we can’t ask our shareholders to take less money. We don’t have that luxury as a 501-c-3. We’re the only plan like us in the state.”

 

Now the burning issue is what happens to the 15,000 children under CareOregon’s wing. They won’t be automatically turned over to FamilyCare on July 1. CareOregon will try to hold onto these children, and their families could also choose between Providence Health Plan and Tuality Healthcare. 

 

“Now we’re in the process of making certain we can reassign as many children to our existing panel,” Mariea-Nason said. “I don’t have specifics about who will go where yet, but our goal is to minimize the impact on children and families.”

 

After receiving a termination notice from the alliance in mid-March, she began meeting with individual pediatric clinics (the alliance has 20 clinics in 26 sites in five counties). Thus far, several clinics have agreed to sign contracts.

 

“These are clinics that have had a long-term successful relationship with us,” Mariea-Nason said. “These clinics should be able to independently contract with whatever health plan they choose. Our goal is to continue working with as many pediatricians who want to see kids.”

 

Fox isn’t aware of any groups that have signed such contracts, “and we know our practices pretty well,” she said. “We think competition among managed care plans is a good thing, and are excited about working with FamilyCare. We think they’re going to be a good partner with us.”

 

FamilyCare has 30,000 Oregon Health Plan members, while CareOregon is the largest plan in the state with 135,000 lives – 2/3rds of whom are children.

 

“We’re very pleased that the alliance has chosen us to be their plan of choice,” said Jeff Heatherington, president and CEO of FamilyCare. “We look forward to working with them in a very collaborative partnership to deliver healthcare to these children.”