Bills Push Financial Transparency In Medicaid Model But Meet Resistance

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Sustainable growth and financial transparency are listed among the state’s priorities for coordinated care organizations vying for Oregon’s second round of Medicaid funding.

Two bills that passed out of the Oregon Senate Committee on Health Care on Monday address both by seeking to place much stricter financial disclosure requirements on coordinated care organizations into Oregon law.

Senate Bill 1030, supported by the defunct coordinated care organization FamilyCare, would mandate the release of a wide range of financial information, from the budget documents the care organizations submit to the federal Centers for Medicare & Medicaid Services to their transactions with subcontracted risk-sharing organizations to more extensive reporting of each group’s highest-paid employees.

The Oregon Health Authority has another proposal to strengthen state oversight of coordinated care organizations as it prepares to award the state’s next round of Medicaid contracts for 2020  through 2024. Senate Bill 1041 would give the health authority greater financial regulatory powers, require state financial audits of coordinated care organizations at least once every five years and give the health authority power to place a struggling organization under state supervision.

Coordinated care organizations submitted financial audits in 2016 and 2017, and the health authority issues a report each year outlining the organizations’ performance in 17 areas of physical, public and behavioral health.

But the 15 active care organizations track much of their data differently, Art Suchorzewski, FamilyCare’s director of government affairs, told Senate Committee members during a public hearing on SB 1030. Compiling independently verified financial data before 2016 requires tracking it down from online databases or requesting it from a patchwork of state and federal agencies, he said.

“Today can we compare one CCO against another in the management of hospitals or pharmacy costs and get to a conclusion about which one performed better?” Suchorzewski said. “This is not possible today because we do not have the level of disclosure required to measure CCOs’ performance or the effectiveness of the state’s oversight of the CCO model.”

FamilyCare, itself a former coordinated care organization, has a contentious relationship with the health authority. It shut down in 2018 over a long dispute over its Medicaid reimbursement rates. The health authority accused FamilyCare of overspending, but FamilyCare has sued and accused the state of favoring Health Share of Oregon as a lone Portland metro area coordinated care provider – a claim the state denies. A lawsuit is pending in a U.S. Appellate Court but may not be heard for several years.

FamilyCare also has been publicly critical of the health agency’s rate-setting method. But Suchorzewski told The Lund Report SB 1030 isn’t about embedding its complaints in state statute.

“Right now, no one really has been able to answer any of the questions that I presented in the testimony,” he said. “How did one CCO perform compared to another? In the tri-county, you had two CCOs for a long time. Did one perform better than the other? Those should be very simple questions, and I don’t think they should be controversial questions.”

No one testified publicly against SB 1030, which would require the health authority to publish a per capita cost report for each of the coordinated care organizations on an annual basis, with a variety of financial data disclosed. It would also require the compilation of the financial data organizations submitted to compile their budgets dating back to 2013.

The five-member Senate Committee on Health Care passed it out of their committee and to the Joint Committee on Ways and Means, which focuses on the financial impact of bills. Health committee chair Sen. Laurie Monnes Anderson, D-Gresham, alluded to a possible fight still to come over the bill at last week’s public hearing.

“There’s a lot in this bill that I like,” Monnes Anderson said. But “I just don’t feel comfortable going back in time on the data collection … The (Legislature) does want accountability, especially when we are dealing with a lot of taxpayer money. I know there are a lot of things CCOs will not like about it.”

The Lund Report reached out to all 15 coordinated care organizations for comment on the bill. None of them responded.

The Oregon Health Authority Bill, SB 1041, wouldn’t put retroactive requirements on care organizations, but it would grant the agency new powers to regulate the organizations under many provisions of the state’s insurance code, even though many of the groups operate as nonprofits and are structured differently than commercial insurers.

It would essentially give the agency financial regulatory powers over the organizations on a par with the state Department of Consumer and Business Services, tasked with much of the state’s consumer protection and business regulation powers, Oregon Health Authority Patrick Allen told Senate health committee members.

The ability to take quick action if a coordinated care organization faces financial difficulty “is completely absent today at the health authority despite the fact that we’ve got billions of dollars every year running through our coordinated care organizations,” Allen said. “They’re tools that as a regulator, and as the person responsible for spending these resources through our CCOs, I’d absolutely hope never to use. But they’re also critically important for our ability to be good stewards of public funds and be able to provide a transparent system.”

CareOregon, which manages physical benefits for two-thirds of Health Share’s more than 300,000 Portland area members, called the health authority’s proposal a reasonable framework. But CareOregon Chief of Staff Jeremiah Rigsby said in an email that the organization was wary of the financial impact it could have.

“The regulatory authority provided in SB 1041 is quite common for insurers in other markets, and we think it’s reasonable for the OHA to request this authority considering the constantly evolving landscape of managed Medicaid in Oregon,” Rigsby wrote. “However, we should be clear eyed about the cost and administrative pressure that these provisions will add to both CCO and state budgets.”

No other coordinated care organization responded to The Lund Report’s request for comment on the bill.

But Mary Williams, a lobbyist with Coalition for a Healthy Oregon, which represents seven coordinated care organizations, indicated in the hearing last week that they oppose the bill. She said they are inherently different than insurance plans the state regulates. Holding them to the same standards would impose burdensome financial and regulatory requirements, she told Senate health committee members, with the potential to increase health system costs.

The bill “would have unintended consequences that we don’t believe have been addressed or vetted in a transparent way,” Williams said, “especially for a bill that seeks to improve transparency.”

The committee voted 4-1 Monday to advance SB 1040 to a full Senate vote. From there, it would go to the House.

You can reach Elon Glucklich at [email protected].

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