$100,000 PAC Contribution to Hospital Association Raises Questions

Oregon Healthcare Enterprises, which is known for administering the hospital provider tax on behalf of the state, made the contribution last year to the hospital association’s PAC

February 17, 2012 -- Whenever an unusual campaign contribution shows up in a political action committee report, heads start turning, asking the pivotal question – what’s the intent behind this?

That’s exactly what happened after a for-profit organization charged with administering the hospital provider tax made a $100,000 contribution to the political action committee of the Oregon Association of Hospital and Health Systems on December 29.

Earlier last year, Oregon Healthcare Enterprises made a $21,605 contribution to that political action committee, and, in 2010, made contributions amounting to $63,758.

OHE has actually been divvying up the federal portion of the hospital provider tax to its member hospitals since 2009 under a contract with the Division of Medical Assistance Programs that runs through 2013. 

Last year, OHE received $269,325 for its financial expertise and another $2,225 for information technology costs from the Division of Medical Assistance Programs.

And, in September, that for-profit entity also changed its name to Apprise Health Insights.

“The definitive thing I can say is that no political contributions are made using funds derived from work Apprise Health Insights does for the state or federal government,” said Pat McCormick, a consultant who’s been hired to handle the organization’s marketing and public relations work.

However, McCormick couldn’t say how Apprise spent the $269,325 it received for administering that contract. “Questions about work that OHE does under contract with the state should be addressed to the agency responsible,” he said in a memo to The Lund Report. “The agency determines the scope of work, sets terms of the agreement and ensures OHE's compliance with contract requirements.”

He also said that the work done by OHE “comprises a small portion of the company's business activities, producing less than 10 percent of its revenues,” adding that “OHE launched its new name with its customers in late September because it better reflects its data-driven decision support tools and consulting services. It's not a different company, just using a different name like The Artist formerly known as Prince. OHE rebranded itself to help it better market its wide range of data services. That's why they retained our services -- to support the company's more aggressive marketing efforts.”

In 2010, OHE was paid $428,000, which included $378,000 for staff costs including sub-contracted financial expertise to Moss Adams and $50,000 in information technology costs to purchase hardware, software and ongoing IT expenses.

In an earlier story that appeared in The Lund Report, Kevin Earls, CEO of OHE, was asked how much of the $378,000 was paid to Moss Adams, but he refused to provide a monetary figure and wrote: “Their payments vary based on the amount of time they spend to complete a given set of defined deliverables.”

According to the contract, Moss Adams provides expertise on “Medicaid payment, cost report and settlement methodologies including, but not limited to, review of claims payment.”

Judy Mohr Peterson, Medicaid director, insisted OHE is not paid a transaction fee to administer the contract and does not earn interest on the $428,000. “They receive quarterly payments based on the work they perform,” she said.

However, it’s unknown how OHE actually spends those dollars since it does not provide the state with a line-item budget, but does provide quarterly reports showing the work that has been performed.

OHE is a for-profit entity and, therefore, is not required to file revenue statements with the IRS.  

The arrangement with OHE is also unique because neither the managed care plans nor the nursing homes have such an entity and they too pay a provider tax to support the Oregon Health Plan.


To read the story about the provider tax that appeared in The Lund Report last year, click here.

To review the latest quarterly statements submitted by Oregon Healthcare Enterprises to the Division of Medical Assistance Programs, click here.

To learn more about the work of Apprise Health Insights, click here.

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Something here doesn't smell right. High priced PR flack responding to questions. Name changes. Cheap website that looks like it was thrown up quickly. Hospital association staff listed as Apprise staff. Laundering Medicaid money back into political action committee contributions to the association that owns the for-profit company. Someone should be looking into this instead of looking the other way. But then again lots of looking the other way in Oregon agencies these days.

Until recently, the Director of Operations, John Swanson, worked in the budget shop at OHA/DHS. The web gets more and more tangled, don't you think?

Data-driven decision support tools and consulting services... No doubt there will be an ample return on this investment! Vendors will invade and audit our electronic health records, piggybacking internet giants like Microsoft in cloud computing as the uncontrolled EHR pandemic lets loose. (See my commentary) And that will further allow "innovations" to ramp up the cost of health care delivery. http://www.privacyrights.org/fs/fs8a-hipaa.htm A couple facts from HIPAA Basics: Medical Privacy in the Electronic Age: Your private health information can be used for marketing and may be disclosed without your authorization to pharmaceutical companies or businesses looking to recall, repair or replace a product or medication. (For more on the marketing of your medical information see Part 5 below.) You have no right to sue under HIPAA for violations of your privacy. In other words, you do not have a "private right of action." Yippee!!! Kris Alman MD