Jeff Heatherington is fighting to keep FamilyCare alive amidst an ongoing battle with the Oregon Health Authority that could result in shuttering his doors.
“We have a target on our back, and they definitely are out to close us down – one way or another,” Heatherington, FamilyCare’s president told The Lund Report. The implications are huge – the CCO has 134,000 Medicaid members, more than 3,500 providers and 300 employees.
“We’re making one last proposal to Lynne Saxton today that falls within the CMS (Centers for Medicare & Medicaid Services) guidelines and doesn’t cost the general fund any money,” he said. “It’s going to be a modification of our original proposal which was also acceptable to CMS but the Department (Oregon Health Authority) refused to entertain any methodology but their own. They know the 2016 capitation rates are actuarially deficient yet insist they have the right to create a deficit for our CCO.”
Saxton was unable to respond to questions by press time.
Both sides have been in mediation for several months without success.
If FamilyCare is dismantled, “Lynne keeps saying there’ll be no disruption in care, but they can’t even handle the enrollment they have now,” Heatherington said. “How are they going to move 130,000 people into active care? No one can promise that.”
But the OHA does have a solution to that impending problem. Last December, when this problem emerged, Saxton asked the other coordinated care organizations to sign binding letters of intent, indicating whether they could absorb FamilyCare’s members and heard from six CCOs which 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.
Meanwhile. to remain afloat, the Oregon Health Authority is asking FamilyCare to reimburse the state for the remaining overpayments, drop its lawsuit challenging OHA to revise rates set for the CCO and agree not to challenge the rates for 2016, 2017 and 2018.
The OHA insists that federal funding from the Centers for Medicare & Medicaid Services is at stake unless FamilyCare agrees with its rate restructuring, while Heatherington says CMS only approves the actuarial soundness of those rates, by region, not the actual figures.
Unless an agreement can be reached on the 2015 and 2016 in less than two weeks -- by March 28 -- termination proceedings will begin. In that event, the two sides will see each other in court.
“The truth is we could settle this but they don’t want to settle, and we intend to take them to court to stop this,” he said. “They’re doing the same thing to us as they’ve done to Oracle, refusing to provide any information. I don’t understand why the governor continues to stand behind someone who is clearly acting outside the bounds of good business and outside the bounds of the law – Lynne Saxton.”
When asked if Governor Brown had been informed about what’s going on, her press spokesman Melissa Navas replied, “The Governor's Office does not comment on pending litigation. As a general matter, the Governor regularly is briefed on major litigation involving the state.”
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 after the Legislative Counsel issued an opinion saying the amendment setting retroactive rates was a violation of Oregon Law.
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.”
Here’s the press release issued by OHA:
Oregon Health Authority proposes resolution to 2015 rate dispute
The Oregon Health Authority (OHA) presented FamilyCare with a plan for resolving the more than $55 million in rate overpayment FamilyCare received in 2015 for providing care to Oregon Health Plan (OHP) members. OHA offered a monetary settlement to address FamilyCare’s dispute that it had the most significant rate difference, when revised 2015 rates were implemented to address concerns with the original 2015 rates. This plan also would allow FamilyCare to have an extended period to make the necessary repayments, through December of 2018.
In exchange, FamilyCare would agree to reimburse Oregon for the remaining overpayments; drop its lawsuit challenging OHA to revise rates set for FamilyCare; and agree that they should not have a separate or different rate methodology than other coordinated care organizations (CCOs).
OHA also has provided FamilyCare a notice of breach of contract in the event the two sides are unable to reach an agreement. OHA has been advised by the federal government’s Center for Medicare and Medicaid Services (CMS) that FamilyCare does not have a valid 2015 or 2016 contract in place. Without a CMS-approved agreement in place, FamilyCare is not in compliance with its state contract to provide coordinated care to Oregon Health Plan members in the tri-county metro region or to receive federal funding for those services. Despite the lack of CMS-approved contract, OHP members will continue to receive their health plan benefits and are not at risk of losing coverage.
Lynne Saxton, director of the Oregon Health Authority said, “This is a reasonable solution that allows FamilyCare and OHA to move forward and focus on serving Oregon Health Plan members.”
Federal government calls for sound FamilyCare rates
At the request of Oregon’s coordinated care organizations and with CMS approval, OHA redeveloped the 2015 rate methodology and in August 2015 issued revised rates. Based on those rates, FamilyCare was liable to return more than $55 million in overpayments. All 15 other CCOs have signed the 2015 contracts with revised rates based on the new rate-setting methods. Family Care is the only CCO that has not reimbursed, or began a plan to reimburse, the state and federal government for its 2015 overpayment.
OHA, in consultation with CMS, has been attempting to resolve this matter with FamilyCare. In late February, CMS issued a letter calling for the state to finalize its 2015 contract with FamilyCare based on the new rate methodology, certification and rates. If FamilyCare doesn’t sign a 2015 contract with CMS-approved rates, the state will be liable for repayment of federal funds already paid to FamilyCare.
“We have a responsibility to protect the health and well-being of Oregon’s most vulnerable citizens — Oregon Health Plan members,” Saxton said. “OHA's proposal is in line with the expectations of Oregon's federal partners, as well as the long-term financial sustainability of our health care system. Now it’s time to move forward and prevent any further worry or disruption for OHP members.”
Oregon’s Medicaid program is funded approximately three-quarters through federal taxpayer dollars and one-quarter through state funds. Funding for a settlement is not available through federal dollars.
Here’s a link to other documents provided by the OHA:
In response, FamilyCare issued the following press release:
Oregon Health Authority Threatens FamilyCare with Termination
Today, Oregon Health Authority (OHA) issued a press release, stating FamilyCare is in breach of contract despite both parties being in ongoing negotiations over the 2015 changes to the rate setting process. OHA's press release also ignores the meeting between OHA and FamilyCare that took place Monday, March 14. Over the past year FamilyCare has, in good faith, offered to resolve the dispute and been in ongoing mediation. Mediation was unilaterally concluded by OHA on Monday with no resolution. If FamilyCare does not agree to OHA's settlement, which includes conditions such as accepting future rates with no challenge and agreeing to not suing OHA in the future, OHA has threatened to terminate FamilyCare's contract with the State.
OHA's actions demonstrate an abuse of power. In choosing to go public with this threat of termination, OHA has intentionally disrupted and undermined FamilyCare's business relationships, causing concerns among providers, members and employees. OHA's summary dismissal of FamilyCare's plan; its failure to acknowledge, address, and engage in discussions to resolve issues; and its threat to terminate FamilyCare's contract demonstrate that OHA is not fulfilling its obligations to CMS to serve the best interest of the state's Medicaid members.
OHA has consistently refused to provide critical information used to develop and calculate the coordinated care organization (CCO) Medicaid reimbursement rates despite multiple requests by FamilyCare. This information for previous years has been publicly available. Proposals presented by OHA have not contained consistent figures. OHA has intentionally treated FamilyCare differently than other CCO's throughout the rate setting process and OHA has been punitive in its treatment of FamilyCare owing to FamilyCare's whistleblowing with regard to OHA's actions.
FamilyCare's proposed plan would cost the state nothing and protects it from the risk of loss of significant federal funds. FamilyCare has proudly and passionately served Oregon's Medicaid members for over 30 years and looks forward to the opportunity to do so for many years to come.
Diane can be reached at [email protected].
