In Bid to Squeeze Out Trillium For Medicaid Contract, Moda Says It Has Backing Of Large Medical Groups

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Moda Health has launched a lobbying campaign to draw support from a wide array of health care providers in Lane County in its bid to wrest the county’s $500 million a year Medicaid contract away from Trillium Community Health Plan.

In emails obtained by The Lund Report, Moda said its application for state approval as a Lane County Medicaid insurer is supported not only by the four PeaceHealth hospitals in the county but also by McKenzie-Willamette Medical Center in Springfield, the 10-clinic Eugene-based Oregon Medical Group physician network and Lane Independent Primary Providers, which represents 70-plus small and rural medical practices. Moda sent the emails to smaller providers in an attempt to gain their support as well.

Moda said PeaceHealth, McKenzie-Willamette, and the two physician groups “are supporting (Moda’s) application and intend to participate as equity partners and/or in governance” in the community care organization Moda wants to establish to manage Medicaid in Lane County.

Last month, the Lund Report revealed that PeaceHealth had terminated its Lane County Medicaid contract with Trillium effective the end of this year, and had committed to contracting instead with  Moda starting in 2020.

Moda has applied for a Lane County contract, which would mark new territory for the Portland-based insurer. It currently is involved in Oregon’s Medicaid program as a part owner of the Eastern Oregon Coordinated Care Organization.

The state is set in July to allocate the Medicaid contracts for 2020 through 2024.

In the emails, Moda said it wants to be the “primary administrator” for Medicaid in Lane County. Currently, Trillium is the sole Medicaid insurer in the county.

The emails suggest that antipathy toward Trillium may run deep.

In them, Moda asked local health care agencies to send the Oregon Health Authority letters endorsing Moda’s application. They also asked local health care agencies to review and sign draft Medicaid contracts on the assumption that Moda wins state approval.

Moda asserted in one email that it is “entering this market at the request of local providers who are interested in alternative ways of delivering care.” Moda’s model “focuses on payer/provider partnerships, community collaboration and makes reinvestments of savings back into the local providers and communities a top priority,” the email said.

If it’s true that Lane County health care providers asked Moda to enter the market, that’s a sign that some providers are deeply unhappy with Trillium. Trillium has been criticized for trying to make too much profit on its Medicare business and building up reserves rather than using cash surpluses for patient care.

Lane County has emerged as a hotly contested market in the state’s process of choosing coordinated care organizations to administer Medicaid insurance. Trillium has applied to continue as the CCO. Moda and Springfield-based PacificSource also have applied. The state is keeping most of the contents of the applications secret until it announces its decisions in July.

The state has not said whether it will approve multiple CCOs for a single geographic area, or will stick to the current system, in which typically there is only one CCO per geographic area.

At stake in Lane County is the roughly $500 million a year the state allocates for the care of the more than 90,000 Oregon Health Plan patients. Trillium currently manages that spending. Since 2015, Trillium has reported total profits totalling more than $13 million on its Lane County Medicaid business. The company has largely placed that money into its reserves, which have grown to $57 million. If the state drops Trillium from Lane County’s Medicaid business, the company can keep the reserves.

The Moda emails show the aggressive tactics the insurer is using to try to build its case with the state. The exact nature of any agreements Moda has reached with PeaceHealth, McKenzie-Willamette, Oregon Medical Group and the independent doctors group is unclear.

Moda, PeaceHealth the independent doctors' group and Trillium did not respond to requests for comment from The Lund Report.

Oregon Medical Group CEO Karen Weiner issued the following statement to The Lund Report:  “Oregon Medical Group supports both Moda’s and PacificSource’s potential to enter the market as a new CCO in Lane county.  We have expressed our support for them to OHA and we would participate in the governance of any/all CCOs in which our patients are enrolled.  We believe choice is good for our community.”

McKenzie-Willamette issued the following statement to The Lund Report: “McKenzie-Willamette Medical Center is supportive of all three applications submitted to be the CCO for Lane County. We look forward to our continued participation in the CCO with the goals of providing high-quality care, reducing cost, and improving outcomes.” McKenzie-Willamette did not respond to questions about whether it had made equity or governance agreements with Moda.

Typically, the hospitals, Oregon Medical Group and the independent doctors' group have contracts with Trillium to provide care to Oregon Health Plan patients at special discounted rates, stretching the state dollars further. If those entities have switched their allegiance - and those discounted rates - to Moda, that might weaken Trillium’s case for continuing to serve as Lane County’s Medicaid insurer. Trillium has previously said it is asking PeaceHealth to reconsider the Medicaid contract cancellation.

Both Moda and Trillium are for-profits. Trillium is owned by publicly traded Centene Corp. of St. Louis, Mo., the largest Medicaid manager in the nation.

Centene bought Trillium from local doctors and investors in 2015. So far, Trillium has hardly proved a goldmine for Centene. Trillium reported to the state that last year it lost $13 million on revenues of $536 million. In 2017, Trillium reported a profit of $7.2 million, and in 2016 it reported a profit of $5 million. The company’s reserves stand at $57 million, up from $41 million in 2015.

Moda, meanwhile, has a checkered financial history.  Besides its partial ownership of Eastern Oregon Coordinated Care Organization, with 50,000 members and Medicaid revenues of about $250 million, it has more than 1 million members with dental insurance and another million with drug coverage. It has a total of 365,000 members with medical plans in Oregon, Washington and Alaska. The company reported a loss of $227 million last year, much of it due to a court ruling that denied Moda’s claim for $250 million in Medicaid reimbursements from the federal government. Moda has appealed to the U.S. Supreme Court.

To stay afloat, Moda earlier this year sold a nearly 50 percent stake in itself for $152 million to a California dental insurance business.

As Moda presses its quest for the Lane County Medicaid market, the question of whether a geographic region should have more than one CCO remains unsettled.

The Lane County commissioners last month declined to back any particular entity’s bid for the Lane County market but urged the state to designate only a single CCO for the county.

“The impact of contracting with more than one CCO in this community (would) be to create multiple and duplicative organizations that demand time from Lane County and other local stakeholders, threatening to reduce the CCO concept to one that is more similar to competing health insurance plans rather than an engine for transformation,” the board wrote. Lane County government is closely involved in Medicaid in Lane County, owning and operating a network of medical clinics that are funded via Trillium and serve Oregon Health Plan members.

You can reach Christian Wihtol at [email protected].

 

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