Agreement could be at hand over a year-long dispute between FamilyCare Health Plan and the Oregon Health Authority just days before termination proceedings were expected to begin.
Earlier this morning, FamilyCare told the state agency it was ready to resolve its dispute with a proposal that meets CMS (Centers for Medicare & Medicaid Services) requirements, and keeps the state from losing more than $500 million in federal funds.
“Today's proposal is in response to OHA's unnecessary and disruptive actions of last week, which left more than 130,000 individuals in the tri-county wondering about the future availability of their healthcare,” according to Jeff Heatherington, president.
Under the proposal, FamilyCare agrees to repay the OHA $47.3 million from 2015, while insisting that its increased 2016 rates for the Affordable Care Act population will be fully funded by the federal government and have no impact on the state general fund, which has been an ongoing dispute.
Under its current 2016 OHA rates, FamilyCare expects to incur a loss of $31.6 million, which has been confirmed by Milliman, an independent actuarial firm. To FamilyCare's knowledge, no other CCO is projecting a loss for 2016, based on its OHA rates. According to Heatherington, FamilyCare took the largest rate hit in the state in 2015, and its revised 2015 rates for FamilyCare are $129 million less than those paid in 2014. By contrast, HealthShare – FamilyCare’s competitor in the tri-county area – received a $10 million increase over the same two-year period, Heatherington said.
“Under today's proposal, FamilyCare's payment rates for the ACA population are still less than the other tri-county CCO, amounting to approximately $46 million less for 2015 and $32 million less in 2016,” he added. “FamilyCare has operated in good faith to reach a resolution, but OHA has consistently thrown up barriers and refused to provide information. Heatherington said FamilyCare, which has been in business for more than 30 years, has exceeded the state's incentive metrics for the past two years, and has been designated a top workplace for the past four years.
“OHA's actions have had and will continue to have a negative impact on thousands of members, providers, staff, and community programs,” he added. “OHA has a fair proposal in front of them, and they're putting the state at financial risk every day they don't act on it.”
In response, OHA Director Lynne Saxton told The Lund Report her agency would be carefully reviewing the proposal with their attorneys, while remaining hopeful an agreement can be reached with FamilyCare later this week.
“We hope to bring this matter to a conclusion so FamilyCare can continue serving its members and taxpayer dollars respected,” she said. “Our interest is in getting this matter resolved in a financially sustainable manner, that’s always been our goal. We’re open to discussion and always have been. If a counter proposal is in order, we’re happy to pursue every avenue.”
If the two sides cannot reach agreement, termination proceedings are expected to begin Friday. Under such a scenario, six CCOs stand ready to absorb FamilyCare’s members, having signed binding letters of intent late last year. They include PacificSource Health Plan, Trillium Community Health Plan (now owned by Centene Corporation), Health Share of Oregon, Willamette Valley Community Health, Eastern Oregon CCO and Columbia Pacific CCO.
When asked about concerns that her agency only intends to choose three to five CCOs for the next contract round, in 2018. Saxton denied that was her goal.
“That’s not true,” Saxton insisted. “That information keeps coming up but hasn’t been brought up by us. The CCOs have been doing a great job with the population they serve. Our goal is to have the CCOs continue the healthcare transformation and produce good results for people, good healthcare. We’ve never talked about three to five CCOs. That’s true in most states but isn’t how Oregon started. We’re not interested in the number of CCOs but in members getting what they need and having a system that’s financially sustainable.”
In an earlier article, FamilyCare indicated it would take the Oregon Health Authority to court if termination proceedings began.
CCOs alerted
Before FamilyCare submitted its counter proposal, Saxton informed the other 15 CCOs about the advice she had received from CMS regarding the situation. She told them:
- Oregon’s redeveloped capitation rates for 2015 are actuarially sound and met federal requirements for payments for all CCOs.
- CMS has approved contract rate amendments for 2015 for all CCOs except FamilyCare.
- CMS will not approve FamilyCare’s original 2015 contract rate amendment for federal funding because the amendment does not include rates that comply with federal law.
- CMS will approve 2015 contract rates for FamilyCare consistent with the 2015 approved redeveloped rate ranges.
- CMS requires that contracts be considered for approval in sequence, therefore, FamilyCare’s 2016 contract rate amendment will not be considered for approval until after CMS approves a 2015 contract rate amendment for FamilyCare.
- CMS has requested that Oregon notify CMS of its plan to resolve the concerns raised in the enclosed letter – these issues could be cured by FamilyCare’s acceptance of the pending 2015 contract rate amendment contract.
Her memo also told them:
The Oregon Health Authority is committed to working with FamilyCare to develop an appropriate strategy to cure the concerns raised by CMS, just as we have with the other 15 CCOs who have signed CMS approved actuarially sound contracts.
This letter from CMS requires that OHA move quickly to develop and implement a plan to resolve the CMS identified issues. If FamilyCare cannot resolve these concerns to CMS’ satisfaction, the state general fund will be at risk for a significant reimbursement to CMS and loss of financial participation for 2015 and 2016 payments to FamilyCare for services based on these unapproved contracts.
OHA will continue to meet with FamilyCare to address CMS’ concerns. OHA is committed to ensuring that no one on the Oregon Health Plan will lose coverage as we work to resolve these issues. As always, our goal has been to provide access to effective care and promote greater well-being for all Oregon Health Plan members. At the same time, we have an obligation to sustainably transform Oregon’s health care system in ways that are consistent with federal Medicaid rules and deliver value to Oregon taxpayers.
Diane can be reached at [email protected].
