FamilyCare Upset Over New Reimbursement Rates

Next Monday, the Oregon Health Authority plans to release the rates for all 16 coordinated care organizations.

There’s not been a public announcement about the new reimbursement rates yet but one coordinated care organization is already raising objections -- FamilyCare.

Jeff Heatherington, its president and CEO, contends that he’s being treated unfairly by the Oregon Health Authority, which, he says, is cutting his rates by $33 million next year, which represents 5 percent of his budget.

“Our rates are being reduced because the Oregon Health Authority tells us we’re paying primary care physicians too much,” he told The Lund Report. “It makes no sense and goes against the spirit of CPC+ and MACRA.” That new federal program makes sweeping changes to how Medicare will pay physicians.

During the negotiation process, the Health Authority makes it clear that CCOs are not allowed to make public statements, contact legislators or initiate a lawsuit if they have a problem with the rates.

But Heatherington called the rate review process “less transparent than last year, saying his health plan is unable to reconcile the numbers because the Health Authority won’t give us the information.”

FamilyCare has been increasing the conversion factor that determines how much physicians are paid for their services over the past few years -- by $38 in 2013, $50 the following year, and $65 in 2015. Now its rates are equivalent to commercial insurance, Heatherington said.

Next Monday, the rates for all of the CCOs will be released and is also submitting the rates to the Centers for Medicare & Medicaid for approval. Until then, officials aren’t responding to any questions, said BethAnne Darby, external relations manager.

“We may challenge the rates at the CMS level,” Heatherington added. “In the past, CMS has been nothing but complimentary to us.”

The Health Authority contracted with Optumas, an actuarial consultant, to develop and actuarially certify the CCO capitation rates.

CCOs have until December 31 to sign the new contracts.

Lawsuit Resolved

Earlier this year FamilyCare and the Oregon Health Authority and FamilyCare reached a settlement agreement that resolves the financial issues in dispute between the parties for the 2015 and 2016 rate years, which initially arose from the rate-setting process started in 2014 in response to the Center for Medicare & Medicaid Services' objections to the state's previous rate-setting process.

Under the settlement agreement, FamilyCare has agreed to dismiss all pending litigation against the OHA, and the OHA has agreed to withdraw its notice of termination of FamilyCare's CCO contract.

FamilyCare had been in the midst of a dispute with the Oregon Health Authority over its Medicaid disbursements from the state, which says it has over-paid the CCO. In April, a judge ordered the Oregon Health Authority to continue paying the CCO until the dispute was resolved.

Both sides had been in mediation for several months without success.

Diane can be reached at [email protected].

News source: