FamilyCare Asks for Transparency as Oregon Health Authority Dodges Hearing

FamilyCare has introduced new legislation to create a more stable and transparent rate-setting process for Medicaid. Opponents of the measure, including CareOregon and the Oregon Health Authority, avoided questioning from the Senate Health Committee; the health authority cited ongoing litigation.

Portland-area coordinated care organization FamilyCare is trying again this year with legislation to pry open the secrecy surrounding the methods that the Oregon Health Authority uses to set rates, which have repeatedly produced payment levels for Medicaid that are the lowest in the state.

Once again, FamilyCare is opposed by CareOregon, which administers healthcare coverage for its competitor, Health Share of Oregon, which has received much higher per-member, per month payments than FamilyCare under the current opaque system, which does not produce actuarially sound rates based on risk at the CCO level, determining risk instead at a regional level.

This “has led to a wide disparity in ratings across the state,” according to FamilyCare lobbyist Art Suchorzewski.

“Variability has increased, as well as volatility,” said Bill Murray, chief operating officer at FamilyCare.

Senate Bill 233 would cast daylight on the Oregon Health Authority’s rate-setting process and require the agency to make public any documentation that it submits to Centers for Medicare & Medicaid Services, as well as any documents, financial data and utilization data it uses to set its rates.

The health authority would also have to set a single risk score statewide, take into account flexible spending and upstream investments into social determinants of health, and then have its actuaries sign off on the actuarial soundness of each CCOs’ rates.

Thirdly, SB 233 sets up an appeal process through a neutral, third-party -- the Department of Consumer & Business Services.

The state average payment per Medicaid member is $440 a month. At $370 a month, FamilyCare is the only CCO paid less than $400. Health Share of Oregon is paid near the state average at $444 a month, while the highest rates, $541 a month, go to the Eastern Oregon CCO, which relies on a lot of expensive rural hospitals for its members’ care.

Neither the Oregon Health Authority nor CCO opponents of SB 233 were willing to give oral testimony, and to therefore be subjected to questions from the Senate Health Committee, although CareOregon and the Oregon Health Authority both submitted their objections in writing.

“I get concerned when nobody testifies in opposition and people work behind the scenes,” said Sen. Elizabeth Steiner Hayward, D-Portland.

Sen. Laurie Monnes Anderson, D-Gresham, said she was informed by the Oregon Health Authority that it would be avoiding public statements about SB 233 and the rate-setting process because of ongoing litigation with FamilyCare over its 2017 rates, but she also read an opinion from legislative attorney Dexter Johnson that stated the lawsuit does not directly impact SB 233, which covers only prospective rates.

“There’s some concerns about transparency and public agencies withholding information,” complained Sen. Lee Beyer, D-Springfield. “You start talking about proprietary information -- well government agencies don’t have proprietary information.”

Sen. Jeff Kruse, R-Roseburg, also accused the health authority of “moving the goal posts” and operating counter to Gov. Kate Brown’s commitment to transparency

Most of the objections to transparency came from CareOregon, which argued that making financial and healthcare utilization data public would undermine its competitiveness.

The Oregon Health Authority argued that SB 233 would harm rural CCOs and that its methods are the sound actuarial ones -- which FamilyCare CEO Jeff Heatherington called baloney.

“There’s nothing in there that hurts any CCO. It asks for actuarial soundness for each,” Heatherington told The Lund Report. “If you have actuarial soundness for each CCO, none of them get hurt.”

The same parties have gone around and around in this fashion for a few years; FamilyCare complains of low rates; the CCOs with good rates praise the current system; legislators express their ire at the Oregon Health Authority -- and the state agency imperiously refuses to change anything about its process.

A lack of transparency has been a problem both for the Oregon Health Authority and the 16 CCOs -- which meet in private to discuss how they will spend billions in tax dollars. In the House, Rep. Mitch Greenlick, D-Portland, has introduced legislation that would pry open those secret deliberations, although, as with FamilyCare’s legislation, his past attempts have gone nowhere.

Reach Chris Gray at chris@thelundreport.org.

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