Digging into CCO Reimbursements

The Lund Report spoke with experts at the Oregon Health Authority to dig into recent rate increases announced for the state’s Medicaid-funded coordinated care organizations. Here’s what they had to say.

Oregon’s coordinated care organizations are getting a raise from the state – about $8 more per Medicaid member per month than they expected to receive in 2018. But at they same time, they’ve been asked to pay back $41 million in overpayments from 2014 and 2015. What’s going on?

The Lund Report spoke with Oregon Health Authority Chief Financial Officer Laura Robison and Chelsea Guest, manager of OHA’s actuarial services, to dig deeper. The following conversation is edited and condensed for clarity and length.

Lund Report: Healthier people who were previously re-enrolled in Medicaid have since been removed from the rolls, so the average population is now sicker. As a result, CCOs are receiving more to compensate for the higher cost of care. Is that right, and can you explain in greater detail?

Laura Robison: The people who did not remain on Medicaid were removede either because they were determined not eligible, or they did not respond when we asked for additional information. The people who remain are higher utilizers of medical services. We did not re-run all risk scores to know what types of conditions these people have – we’ll do that for the 2019 rates that we will develop. But the people remaining on Medicaid were using more services and on average they were costing more.

Lund Report: Where does the money come from to pay CCOs these higher rates? Is this from state or federal funds?

Robison: This early in the budget cycle, the total budget depends not just on what rate we pay, but how many people we have in our Medicaid case load, what category they fall into, and so forth. This early in the biennium, we are not requesting additional funds.

Lund Report: With CCOs having fewer overall members, but receiving more money per member, it sounds like even with higher reimbursements OHA may not need to spend more, then. If you have more people but pay less per person, vs fewer people and a higher cost per person, could it even out?

Robison: Our rate increase is a weighted average based on an estimate. We will keep monitoring our case load.

Lund Report: Your figures show that 47,000 people are no longer on Medicaid, which contributed to this rate adjustment. How many of them are uninsured now?

Robison: When they are found ineligible, we provide information to people about the marketplace – depending on their circumstances, they could be eligible for a subsidy. We do not track where these people landed. Some could be uninsured.

Lund Report: CCO reimbursement rates are being changed mid-year. Now the average that CCOs receive is going up. When does this go into effect?

Chelsea Guest: This is retroactive back to January. Health Share’s rate will be effective for the tri-county population from February onward (reflecting changes in its membership associated with the end of FamilyCare.)

Lund Report: Health Share’s reimbursement rate is going down 0.6 percent as a result of FamilyCare members joining its ranks. For years FamilyCare complained that it was not receiving enough reimbursement for its members. Now that Health Share has taken on FamilyCare members, its rates are dropping too. Can you explain the calculations here?

Robison: We break down our rates by category: children by age, adults by age, you’ve got your elderly and disabled, and so forth. Within those categories, we differentiate by CCO based on the health risk profile of their members. With FamilyCare’s members transitioning mostly to Health Share, on average those FamilyCare members had a lower risk score, so they were healthier on average, than the members Health Share had on their books. Blending those two means we had to blend Health Share’s rates down, relative to what they had been.

Guest: To clarify, Health Share’s rates did go up, on average – but they went up by less than they would have if the transition of FamilyCare members had not happened. The impact of the FamilyCare transition was 0.6 percent per member per month. Then those rates went up like all other CCOs  -- but they would not go up as much as they would have without FamilyCare’s members.

Lund Report: At the same time as CCOs are learning they’ll get more for their members in 2018, they are being ordered to repay $41 million from overpayments made in previous year. Who will get those funds when the CCOs pay the money back?

Robison: The majority is federal funds and will essentially need to be repaid – it will be refunded to the feds. A small amount will be credited back to the Oregon Health Authority’s general fund account.

Lund Report: The funds the Oregon Health Authority wants back include $3.7 million from FamilyCare. How are you going to collect on that? Will the state be responsible to pay that back to the federal government if you can’t collect?

Robison: We are working with all the CCOs, FamilyCare included, to develop the next steps and start recoupment for the state. It does not matter if they have a contract with the state for this year.

Lund Report: What does that specifically mean for FamilyCare?

Robison: We are working with all of the CCOs. We have given them all of the information, and we are available for questions and issues that come up as CCOs look at their own data. That’s where we are with the entire program.

Lund Report: One reason CCOs are being asked to repay funds for past reimbursements is that they essentially over-billed for reimbursement of about 41,000 members who were enrolled in both Medicaid and other medical programs that should have helped pick up the cost. Meanwhile, in 2018 rates are going up because 47,000 people were removed from Medicaid rolls as ineligible. That’s a total of 88,000 people over a period of time that were in the wrong program, one way or another. What is the state doing to avoid this going forward?

Robison: There are two fundamentally different issues here.

We had people being incorrectly categorized as ACA expansion adults.  We had people flagged as having one type of eligibility, when they were also eligible for Medicare. We always have fluid changes to membership categories – people can become retroactively eligible for Medicare, so there are always changes happening to our population. But we fixed the problem of miscategorizing people in 2016.

Re-determining Medicaid eligibility was a separate issue. I’m fairly certain it came from the difficulties with Cover Oregon. (Editor’s note: Cover Oregon was the costly failed marketplace the state attempted to roll out for Medicaid and insurance enrollment.) It took several years and we had to push to get through those redeterminations over the summer.

Guest:  CMS gave us the time to do all the redeterminations correctly. The most difficult ones, where we had to do manual checking, took longer

Robison: We now have an annual redetermination process in place throughout the system so we will not have to go through a manual process like that again.

Lund Report: So CCOs are getting more per member per month, and then at they same time they have to pay the state back for previous years. Do these things even out? Will higher rates offset what CCOs have to pay back?

Robison: We haven’t done that math or looked at it from that perspective. These are two different issues arising from two different periods of time.

Lund Report: Does the Oregon Health Authority or the does the state face any penalties to the Centers for Medicare and Medicaid Services because of these errors?

Robison: I’m not aware of any penalties. We have been working with CMS.

Lund Report: That’s it for our questions. Is there anything else you would like to add?

Robison: We are going to be monitoring both the case load and mix of members, but it’s an important reminder of the needs for us to continue our focus on the sustainability of our Medicaid program and achieving the triple aim of better health, better care and lower costs.

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Reach Courtney Sherwood at sherwood@thelundreport.org.