FamilyCare, OHA in Mediation Over 2015 Contract

The legal opinion from the Legislative Counsel sided with FamilyCare.

FamilyCare still has not signed the 2015 contract amendment with the Oregon Health Authority and has refused to return the $55 million in supposed overpayments. But the CCO may have the law on its side.

CEO Jeff Heatherington told The Lund Report that “We are pleased to see that the Legislative Counsel issued an opinion earlier this month that the amendment setting retroactive rates was a violation of Oregon Law.”

Nevertheless, the Oregon Health Authority says the matter is now in mediation, while six other coordinated care organizations appear eager to take over FamilyCare’s territory in Multnomah, Clackamas, Washington and Marion counties after Director Lynne Saxton took preemptive action, asking for binding letters of intent.

The Health Authority insisted it was only taking a “precautionary step to ensure continuity of coverage," and it’s unknown whether the agency will move forward with its emergency plan.

The six CCOs include PacificSource, Trillium, Health Share, Willamette Valley Community Health, Eastern Oregon CCO and Columbia Pacific CCO.

Sen. Chip Shields, D-Portland, had requested that legal opinion, which could also affect the claw back the Oregon Health Authority demanded of several other CCOs, including AllCare Health Plan, Umpqua Health Alliance and Jackson Care Connect, which is administered by CareOregon.

The Health Authority does not have the statutory authority to reclaim those dollars, according to Dexter Johnson, legal counsel. “However,” he wrote, “these questions may be at issue in pending litigation between FamilyCare and the OHA, and facts or arguments may be revealed during the course of that litigation that might lead a court to a different conclusion.”

Johnson's opinion does leave open the possibility that the Legislature could require FamilyCare to return those dollars.

Earlier, Heatherington said, “This opinion follows the same legal reasoning our attorneys gave us in the first place. We hope the OHA will do the right thing and give the funds back to the CCOs who did sign the amendment.”

The FamilyCare litigation referenced in the opinion is not related to the retroactive payments, according to Cindy Becker, vice president of community and government relations, who told The Lund Report earlier, “Our suit was filed in May and we were notified about the retroactive payments in August.”

2016 Amendment Unsigned

FamilyCare has not yet signed the 2016 contract amendment. However, Heatherington insists that will happen, saying, “We have concerns about certain parts of the amendment and have voiced those to the OHA, but they have not responded to those concerns. Unfortunately, the OHA is in a position to ignore any concerns because failure to sign, or signing with reservations of any kind allows the OHA to terminate the contract immediately on December 31."

Diane can be reached at [email protected].

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