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Greenlick Fights to Defend CCO Reforms in House Rules Committee

The House Health Chairman now hopes to pass a compromise arrangement brokered by House Speaker Tina Kotek that would allow the Oregon Health Authority to set the rules to protect the state’s Medicaid reserves from Wall Street poaching and make sure those tax dollars are spent on community health.
May 5, 2017

He may have left his fedora at home, but like Indiana Jones, Rep. Mitch Greenlick, D-Portland, and his sidekick House Speaker Tina Kotek, D-Portland, descended into a snake pit of a hearing room in the bowels of the Capitol on Thursday to defend his Medicaid reform legislation against a roomful of lobbyists opposed to House Bill 2122.

Greenlick is striving to protect the public’s investment in coordinated care organizations while making the often-shadowy organizations more transparent and accountable to the public. These groups are commissioned to use tax dollars to provide medical care for the state’s most vulnerable residents, but lately they’ve been seen as targets for Wall Street takeover, and they operate in an environment that gives the public little information about the $10 billion annually entrusted in the organizations.

At the hearing of the House Rules Committee, Kotek proposed a compromise that would direct the Oregon Health Authority to convene a rulemaking committee to set rules about putting excess CCO revenue toward investments in the social determinants of health. The health authority would also have to consult with the Department of Consumer & Business Services to determine the financial solvency requirements for the CCOs, which act as insurance companies for Medicaid.

CCO reserves hit $923 million in March 2016, worrying Greenlick that the locally run Medicaid plans could be ripe for corporate takeovers, which would allow out-of-state corporations to loot taxpayer dollars from the Medicaid system. He wants those funds to be spent on upstream investments that will create healthier communities and reduce the tax dollars that must be spent treating people getting sick from preventable illnesses.

The amended bill maintains the earlier version’s mandate for CCOs to operate under the Oregon Public Meetings Law, but a compromise will allow new CCOs to be either non-profits or for-profits filed as a benefit corporation, while leaving the structure of the 16 existing CCOs unaffected.

That compromise validates a move made by one of HB 2122’s opponents, All-Care Health, which recently reorganized itself as a benefit corporation, and allows that model as well as a non-profit model for any new CCOs. Kotek said All-Care’s move was more than just window gloss designed to help its brand, but would make sure the southern Oregon CCO serves its community without compromising health for the sake of a shareholder.

“We added B corps, as they are restricted, so that on dissolution, the corporation must distribute the corporation’s assets to an organization organized for a public or charitable purpose ... that is recognized as exempt under section 501(c)(3),” said Kotek. “We believe this further [limits] the risk that state dollars, intended for the delivery of health care to Oregonians, could be funneled out of state through sale or merger. It also holds CCOs accountable to their communities.”

The for-profit CCOs are still fighting the bill, and it has been rumored that several of them are ready to cash in on their investment in Medicaid. These companies likely oppose HB 2122 because it would make them less attractive to corporate investors, who would be restricted in their ability to bank future profits off the state’s Medicaid system.

“The tax dollars we put into CCOs is put there to benefit the community, not to be put into the pockets of some shareholder,” Greenlick said.

House Minority Leader Mike McLane, R-Prineville, came out swinging for the for-profit CCOs and their right to keep any surplus money that the state gives them to provide Medicaid, so long as they do a good job.

The Coalition of a Healthy Oregon, which represents many of the for-profit CCOs, has spent over a million dollars over the past several years on legislative campaigns to influence public policy. McLane has been the recipient of tens of thousands of that money while many Democrats, including House Rules Committee members Rep. Dan Rayfield, D-Corvallis, and Rep. Rob Nosse, D-Portland, also received several thousand dollars each as recently as last fall.

Some of the best-performing CCOs, such as Willamette Valley Community Health in Salem and All-Care Health Plan, are set up with a for-profit model. House Bill 2122 would allow them to keep that model as well as allow future CCOs to be for-profit if they file as a B-Corp.

However, the two most troubled CCOs -- Trillium Health Plan and Cascade Health Alliance -- are also both for-profits, and at times have failed to provide access to primary care for everyone eligible for Medicaid in their communities, even as Trillium's profits soared. Those people were temporarily put onto the state’s fee-for-service system, where they received an open card that granted them little more than access to safety-net clinics and emergency rooms.

Trillium, in particular, has motivated supporters of HB 2122 to protect the taxpayer investment in CCOs. The lack of primary care access for Oregon Health Plan members came even as Trillium negotiated a sale to Centene Corp for $109 million, a lucrative deal that made several shareholders millionaires. Healthcare activists in Eugene have accused Trillium of deliberately underpaying providers to inflate the value of their company, putting their profits over the people they were meant to serve.

Greenlick also argued that the state has a duty to oversee the $10 billion spent annually on the CCOs more stringently than it’s currently doing for these quasi-public entities. He said his recommendation came after an exhaustive public outreach campaign by the Oregon Health Policy Board into improving the CCOs for their new contract.

“They are spending $10 billion in tax dollars a year,” he said. “The Oregon Health Policy Board felt it important they be spending it publicly.”

In her testimony, COHO lobbyist Courtney Johnston fought against public meetings and for continued secrecy, arguing that public oversight would open the floodgates to scrutiny of other state contractors such as hospital boards.

However, Oregon Health & Science University, arguably the state’s most successful hospital, does comply with the Oregon Public Meetings Law, and CCOs, unlike private hospitals, have always been explicitly mandated to include some public oversight, including a county commissioner and a member of their community advisory councils.

The hands-off approach advocated by COHO and McLane is ironic given the state’s recent string of failures when it has not provided proper oversight in projects such as the Oracle/Cover Oregon health exchange website and the Columbia River Crossing, two debacles rightfully criticized by Republicans as a grotesque waste of taxpayer money.

Although none testified, not all of the lobbyists in the room oppose Greenlick’s bill. HB 2122 has been endorsed by the Oregon Nurses Association and the state’s top public employee unions as well as the Oregon Law Center and the Oregon Public Interest Research Group. The Oregon Health Policy Board also supports HB 2122’s broad concepts, in a letter signed by health leaders such as Dr. Joe Robertson of OHSU and Felisa Hagins of SEIU Local 49.

Despite All-Care Anecdote, CCOs Struggle at Dental Integration

All-Care lobbyist Josh Balloch showed a three-minute video at the hearing, describing one patient who, because of All-Care’s efforts coordinating with Capital Dental Care, was able to receive a new pair of dentures that the Oregon Health Plan would not have otherwise covered at the time, allowing her to gain weight and have better psychological health as she recovered from cancer.

While Balloch was able to present an anecdotal success story of All-Care’s improved coordination with dental care, in the aggregate the CCOs are actually doing worse than their predecessor organizations to provide more routine dental services.

Utilization among children has fallen from 45 percent receiving annual dental checkups in 2011, when the care was administered strictly by dental care organizations, to just 42 percent today, with CCOs overseeing the contacts for the DCOs. The decline in Oregon comes even as national utilization has risen to 50 percent of children on Medicaid seeing a dentist at least once a year.

The conflicts of interests that discourage spending on dental care are often baked into the CCOs’ secretive boards --  boards controlled by hospitals and physicians, who are inherently more concerned with their own profits than other providers. Only six of the CCOs have a dentist who provides care to their members on their boards of directors.

The Oregon Health Authority has also not required adequate quality control metrics for dental services -- which enables the CCOs to shirk this service. The only metric measured for dental care is sealants on permanent molars for children, and the CCOs only have to serve 20 percent of children to get a passing grade.

Advantage Dental was able to win passage of a bill that will require all CCOs to have a DCO dentist on their boards -- one of the few battles the CCOs, who opposed the legislation, have lost.

Reach Chris Gray at [email protected].