Transformation Legislation Passes Ways and Means; Faces Tough Vote in Senate

February 10, 2012—The joint Ways and Means Committee passed the legislation allowing the Oregon Health Authority to begin soliciting proposals for coordinated care organizations (CCOs) earlier this afternoon, but it is unclear if Senate Bill 1580 has the votes needed to pass the Senate.

The full Senate could vote on the bill as early as Monday. In the last week, there has been an outburst of opposition to the bill from Senate Republicans and Sen. Betsy Johnson (D-Scappoose), the Senate’s most conservative Democrat, who have stated multiple times that they will not support the legislation if it does not include medical liability reform.

The vote in the joint budget-writing Ways and Means Committee was 19-5, with many Republicans voting in favor of the bill. Sen. Johnson voted to pass the bill, but said that she “respectfully reserves the right to vote no on the Senate floor.” Rep. Gene Whisnant (R-Bend) voted against the bill, but said he also may change his vote when the bill is considered next week.

This leaves the bill’s fate to last-minute, high stakes political negotiations, lobbying and vote counting. 

“It’s high noon,” Sen. Alan Bates (D-Medford) said during the Ways and Means hearing. “We’re all out in the street with this now.”

On Monday, the Senate Republicans and Johnson stated their position in a signed letter to Governor John Kitzhaber, Senate President Peter Courtney, the House’s Co-Speakers Arnie Roblan (D-Coos Bay) Bruce Hanna (R-Roseburg), and the caucus leaders. After the Ways and Means hearing this afternoon, the Senate Republican office released a press release stating that health transformation “cannot move forward without serious tort reform.”

Republicans have never made secret their interest in having medical liability reform become part of the healthcare transformation legislation, which would completely overhaul the Oregon Health Plan’s delivery system by creating CCOs which will coordinate and integrate physical, mental and dental healthcare, and save money by focusing on prevention and reducing hospital costs.

As far back as May 2011, when the Legislature’s Joint Healthcare Transformation Committee was meeting to craft the language of House Bill 3650, Republicans insisted that liability reform be included in the legislation—or else.

“If you want to save this bill [from dying], there's a way to do it and address medical malpractice,” Sen. Frank Morse (R-Albant) said during a committee hearing.

The Oregon Health Authority commissioned a study to deal with medical liability reform, which determined that the state could save approximately $30 million from Medicaid expenditures. With the enactment of Senate Bill 1580, a Governor-appointed group would be created, called the Patient Safety and Defensive Medicine Work Group, which would develop legislation for the 2013 session on medical liability reform. “It will have a serious discussion,” Bates said.

Bates and other Democratic legislators have insisted they are committed to addressing medical liability during the 2013 legislative session, and have argued that this issue is to complex to resolve in the remaining two weeks of the current session. “We just couldn’t do it this session,” Bates said during a Ways and Means Subcommittee hearing that passed Senate Bill 1580 earlier this week.

But Republicans, who are unsatisfied and refuse to wait, introduced an amendment during today’s Ways and Means hearing that would provide coverage for any medical provider participating in a CCO under the Oregon Tort Claims Act, which limits liability damages against public institutions such as Oregon Health & Science University. That would cap damages at  $566,700.

“I do not believe that [transformation] can be successful without significant medical liability reform,” said Sen. Doug Whitsett (R-Klamath Falls).

“You can’t talk about cost containment without talking about medical malpractice and defensive medicine,” said Sen. Jackie Winters (R-Salem). “If not now, when?”

The motion to include the medical liability language in Senate Bill 1580 narrowly failed in a 13-12 vote. Sen. Chris Edwards (D-Eugene) voted against including the medical liability language, saying that the reforms can wait until 2013.

“I’m a member of the Legislature that wants to see significant medical malpractice reform, [but] I’m not prepared to vote on something of that magnitude,” he said. “I believe in the good faith statements of Senator Bates.”

When the Ways and Means Committee voted to send Senate Bill 1580 to the Senate floor, members who supported the bill argued that the legislation was necessary to balance the state’s budget. The current budget assumes a $239 million in savings as a result of coordinating care starting in July, and the federal government has signaled that it’s willing to give Oregon up to $500 million a year over the next five years to help pay for the transformation reform.

“There are no dollars in this budget to move to fill that hole,” said Sen. Richard Devlin (D-Tualatin), a co-chair of the Ways and Means Committee.

Winters questioned whether the federal government would follow through on its promise. “None of us have seen any documents from the Obama Administration that this money, in fact, exists,” she said.

“I share your concern,” said Rep. Tim Freeman (R-Roseburg), one of the legislators who’s been negotiating the language of Senate Bill 1580. “Regardless of whether we get the money or not, changing the healthcare system to a local, coordinated system is the right thing to do. The policy is sound regardless of the $500 million promised by the federal government.”

To read the letter Senate Republicans sent to Governor Kitzhaber and legislative leadership, click here.