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Greenlick Loses CCO Transparency Battle, but Preserves Medicaid Protections

Pressure from coordinated care organizations forced Democrats to drop requirements that the opaque Medicaid insurance providers meet openly. But HB 2122 should still stop out-of-state corporations from taking over the state Medicaid system and siphoning healthcare dollars for the poor for Wall Street portfolios.
May 12, 2017

Rep. Mitch Greenlick’s attempt to protect and improve the community-based focus of the state Medicaid program has survived the House Rules Committee on a party-line 5-4 vote and will head to the House floor for a vote next week.

But House Bill 2122 did not leave the snake pit of the Rules Committee without injury, as Greenlick and House Speaker Tina Kotek, both Portland Democrats, were forced to sacrifice transparency in order to preserve the parts of the bill that would block out-of-state for-profit companies like Centene Corp. from looting the public investment.

The coordinated care organizations showed a united front in their opposition to public meetings and other transparency measures, which would give the public more knowledge of how the hospitals and physician groups that control the Medicaid plans divvy up $5 billion in tax dollars a year.

But that united front fractured when it came to Greenlick’s efforts to block a Wall Street takeover of the CCOs, as non-profit Medicaid plans such as Health Share of Oregon, which is dominated by Portland’s leading hospital systems, have no intention of selling out, and would be minimally impacted by the amended HB 2122.

The Coalition for a Healthy Oregon, whose for-profit CCO members stand to make a fortune, like their peers at Trillium Community Health Plan in Eugene, if they are also able to sell to Centene, remains opposed.

HB 2122 thwarts their plans by requiring any CCO after 2023 to be nonprofit, or a for-profit benefit corporation similar to All-Care Health, which is allowed to make money for its current risk-taking shareholders, but will be required to donate its assets to a public good upon dissolution.

The other for-profit CCOs will have five years to follow All-Care’s path and convert to benefit corporations or become nonprofits.

“They know that at the end of five years, [unchecked profits] won’t be a feature,” Greenlick told The Lund Report after the vote. “I can’t imagine anyone would come in with that short of prospective.”

Importantly, the nonprofit Portland CCO FamilyCare, broke from its for-profit COHO brethren and joined Health Share to support the amended version of HB 2122.

Furor Over Lane County

But House Minority Leader Mike McLane, R-Prineville, was furious that Democrats continued to support even the amended version of HB 2122, which he said interfered with the risk-bearing CCO owners’ right to make a profit off of Medicaid, so long as they were providing quality care.

McLane promised a battle on the House floor and a Republican “minority report” -- an amendment from the opposition to gut the bill.

“For-profit companies are not lesser Oregonians and the people who work for them are not somehow inferior,” McLane said. “This smells of the politics of envy based on what happened in Lane County.”

Two years ago, the doctor’s organization that owned Trillium sold out to Centene for $109 million, capitalizing on healthcare dollars given to them to treat poor people. The sale came after Trillium had failed to immediately absorb the people newly insured by the Medicaid expansion, shutting them out of primary care and dumping them on the state’s open-card system, which has little to no access. Trillium’s medical spending on primary care is below the state average, making it harder to convince primary care providers to accept their patients.

“I do think the situation with what happened with Trillium in Lane County does give us pause,” said Rep. Rob Nosse, D-Portland. “It makes some of us nervous that a company could come in from another place and make money from our public investment and leave and take the reserves with them.”

Trillium lined up providers to oppose the bill, but all had business relationships with the CCO, creating a conflict of interest and a reason to play nice with the company, which has a monopoly on Medicaid in Lane County.

Rep. Paul Holvey, D-Eugene, said a line of physicians told him privately that they’d all like to see Trillium become a nonprofit. “Public dollars should be used to fund public services. I’m not saying the care is any better or worse but those reserves should be used to the greatest extent possible for healthcare.”

Lost Battles

Greenlick was disappointed that he once again lost the battle for public oversight of CCOs, but said it will still crack some daylight on the cavelike operations of the coordinated care organizations. “You can’t let the perfect be the enemy of the good.”

The amendment removes the requirement that CCOs follow public meetings law for their governing boards. CCOs will have to provide minutes of their board meetings, a practice currently done by Portland CCO Health Share of Oregon.

CCOs will also have to report annually to the Oregon Health Authority the activities of their governing boards, their profit margins and medical and non-medical spending, investments, and payments made to partner organizations. The state agency would then need to make this information public.

Excess revenues will have to be put back into the community through social service programs that aim to eliminate disparities in the socioeconomic determinants of health, which inevitably drive up the cost of providing medical services for low-income people and diminish their quality of life.

The Health Authority, in consultation with the Department of Consumer & Business Services, will convene a rulemaking committee to determine a fair amount of reserves for the CCOs.

Reach Chris Gray at [email protected].