Skip to main content

Health Authority Approves 15 CCO Applications

July 9, 2019

The Oregon Health Authority announced Tuesday that it plans to open up the $6 billion Medicaid market next year, giving hundreds of thousands of Oregonians covered by the Oregon Health Plan the potential to be covered by a new insurer next year.  

The agency, which oversees Medicaid in Oregon, said it will allow competition in the tri-county Portland area and in Lane County but the authority rejected applications by Moda which sought to expand into the north coast region and Lane County, it denied a renewal request by PrimaryHealth in Josephine County and rejected a bid by the newly formed Marion Polk Community Care in the Salem area.

The agency also put four smaller companies that serve consumers in rural areas on notice by only awarding them one-year contracts. The authority gave eight other coordinated care organizations five-year contracts. The awards are contingent on the companies passing a detailed review in August and September of their finances and operations. 

“We’ve been calling this CCO 2.0 from the very beginning to communicate that this is about raising everyone’s game," Patrick Allen, director of the Oregon Health Authority, told The Lund Report. "The fact that this application was hard for some folks I think is evidence that we really have raised the bar and we are expecting more out of CCOs."

Oregon's coordinated care organizations were launched in 2012 under former Gov. John Kitzhaber, a former emergency room physician. With the state's expansion of Medicaid under the Affordable Care Act, the Oregon Health Plan currently serves nearly 1 million people -- one in four Oregonians. Residents can qualify for the plan if they earn no more than $1,436 a month if they’re single or $2,961 for a family of four. Members have to pay a monthly fee -- $100 a month in the Portland area -- but otherwise, the care is free. Most members are served by coordinated care organizations which had to submit applications for a new contract this spring. 

The authority approved 15 applications from 11 companies. They include Trillium Community Health Plan Inc.’s bid to move into Clackamas, Multnomah and Washington counties. That area is now solely served by Health Share of Oregon, a nonprofit governed by 11 health and social service organizations. Health Share gained a monopoly of the market in 2018 when FamilyCare Health pulled out over a long-running rate dispute with the health authority. FamilyCare’s 115,000 members were transferred to Health Share, which now serves  312,000 people in the Portland area. The contract was worth nearly $2 billion last year. 

Trillium, based in Eugene, is owned by Centene Corp., a for-profit insurer that has its headquarters in Missouri. Centene is the country’s largest Medicaid insurer, with a market capitalization of $23.87 billion as of Tuesday. Trillium, which currently enjoys a monopoly in Lane County, received $528 million in 2018 to serve the region’s 88,000 Medicaid members. Starting next year, it will face competition. The health authority approved the application by PacificSource to move into Lane County.

Trillium's spokeswoman did not respond Tuesday to a request for comment. In response to questions by The Lund Report, Health Share said the company "remains focused on providing the best care for our members and continuing our record of success improving care and containing costs." The company said that its members will continue to have access to its expansive network, including Adventist Health, CareOregon, Central City Concern, Clackamas County, Kaiser Permanente, Legacy Health, Multnomah County, Oregon Health & Science University, Providence Health & Services, Tuality Healthcare and Washington County.

In Marion and Polk counties, the health authority approved PacificSource as the sole insurer. The area has 100,000 Medicaid members and was worth $485 million in 2018. The region is currently served by Willamette Community Health, which is disbanding. A new organization, Marion Polk Community Care, was created in its place but that nonprofit lost its bid to replace Willamette.

Ken Provencher, president and CEO of PacificSource, said the company is thrilled with the awards.

“We feel like the decision endorses our approach and the hard work we’ve done to not just complete the application but to do a lot of the up-front work to put a lot of the pieces in place in these regions that are new to us,” Provencher told The Lund Report.

(See our separate story on PacificSource.)

The company now has to line up contracts with physicians, nurses and other medical professionals. PeaceHealth, the main provider in Lane County, endorsed Moda's application.

The health authority rejected Moda’s bid to move into Lane County under the newly formed West Central Coordinated Care Organization, and it denied the application of another Moda-backed company, Northwest Coordinated Care Organization, which requested a contract in Clatsop, Columbia and Tillamook counties. Columbia Pacific CCO, which is owned by CareOregon, will continue to enjoy its monopoly in the north coast region, the health authority decided.  

Allen said the denials were based in part on the quality of the applications and the size of the regions.

"Each of the applications was relatively weak," Allen said. "In the case of the north coast, there were only enough members for there to be one CCO, and in the case of Lane County, there were only enough members to be two." 

    Moda has seven days to appeal the rejection but Allen said the company would have to show that the health authority violated the contract process to win an award.

    Moda will remain the sole insurer in eastern Oregon through the Eastern Oregon Coordinated Care Organization.

    Moda released a statement after the decisions were announced, saying it was pleased it will continue to serve members in eastern Oregon.

    "This decision affirms that our innovative community-based approach works -- and will continue to work – as the people of Eastern Oregon embrace opportunities to build their own healthier communities," the statement said. "We had hoped, based on our demonstrated success in Eastern Oregon, that we’d have the opportunity to deliver these same high levels of care to people on the North Coast and in Lane County."

    The health authority said the applications were judged on six areas: 

    • Care coordination and integration: Ability to coordinate with outside entities (including public and community-based organizations), between levels of care, for special populations of members and to integrate behavioral and oral health services.
    • Delivery system transformation: Innovating to improve care delivery and quality (including primary care), access to culturally and linguistically appropriate care, measurement of value and efficiency of services.
    • Community engagement: Strength of the Community Engagement Plan and of community engagement in developing the application.
    • Clinical and service delivery: Utilization monitoring, ensuring appropriate access to services, clinical review and prior authorization, and approach to addressing complaints and grievances.
    • Business administration: CCO business processes, member engagement and outreach, adoption of electronic health records, data systems, and supporting members during transition.
    • Finance: Applicant solvency, ownership and affiliations, National  Association of Insurance Commissioners (NAIC) reporting, arrangements with pharmacy benefit managers, plans for increasing value-based payments, tracking and reporting of social determinants of health investments and outcomes, managing within the global budget, and cost containment.

    The health authority only rejected the application of one existing company: PrimaryHealth. It will no longer serve as a coordinated care organization in Josephine County starting next year. Its members were effectively awarded to AllCare CCO, which already has other clients in the county. The health authority put AllCare and three other insurers -- Cascade Health Alliance, Umpqua Health Alliance and Yamhill County Care Organization --  on notice by only giving them a contract for next year. It said the four companies, currently serving Medicaid members in rural areas, will be put on "remediation plans" to show that they can meet the expectations of the next Medicaid round, dubbed CCO 2.0. Under the new contracts, coordinated care organizations will be required to advance the Medicaid agenda of Gov. Kate Brown. Her priorities include improving access to behavioral health care, keeping cost growth below 3.4 percent, shifting to a payment system that rewards positive health outcomes instead of paying per procedure and investing in social determinants of health such as housing and education.

    Allen said the four companies are doing a good job under the current system and that the health authority wanted to give them time to raise their standards to meet the new expectations.

    "I hope in all four of these cases that what we’ll be able to do in a year is award the other four years of the contract and move forward," Allen said.

    Josh Balloch, vice president of government affairs for AllCare, said that the company did not do as well as it could have in describing how it will meet the requirements of CCO 2.0.

    "We really do appreciate the opportunity to work to clarify and expand on what we're currently doing," Balloch told The Lund Report. "We hope we’ll be able to show our readiness for a five-year contract in pretty short order."

    AllCare currently serves 50,000 people in southern Oregon. It expects to add about 10,000 by taking over PrimaryHealth's clients in Josephine County.

    In other areas, where there is competition among CCOs, the health authority will assign members to one company. Assignments will be based on provider relationships, Allen said.

    “We’re going to put a premium on making sure that people’s connection with their primary care and behavioral health providers stays the same," Allen said. "Although there are a bunch of scenarios and they get complicated the simplest scenario is that if I am a regular patient of doctor 1 and doctor 1 ends up being in-network in CCO A but not CCO B then I’ll be assigned to CCO A so that my relationship with doctor 1 stays unbroken."

    The assignments will happen this fall along with rate setting. Allen said the agency is moving toward a two-year rate-setting process to try to limit dramatic changes every year.

    To do that, the agency will stop handing out incentive bonuses. These have been given to CCOs at the end of the year for meeting 17 quality measures, which include things like screening children for disabilities, smoking cessation programs and well child checks. That money will be folded instead into the rates but it will be held back so that companies will have to show that they are meeting expectations.

    “We’re trying to basically get as close as we can in federal rules to a long-term global budget kind of rate,” Allen said.


    Here are the awards:


    AllCare CCO Inc. 1 year

    Curry, Jackson, Josephine and partial Douglas


    Cascade Health Alliance 1 year Partial Klamath County Columbia Pacific CCO 5 years

    Clatsop, Columbia, and

    Eastern Oregon Coordinated Care Organization 5 years Sherman, Gilliam, Morrow,
    Umatilla, Union, Wallowa,
    Wheeler, Grant, Baker, Lake,
    Harney, and Malheur Health Share of Oregon 5 years

    Clackamas, Multnomah, and

    InterCommunity Health Network dba
    InterCommunity Health Network Coordinated
    Care Organization 5 years Lincoln, Benton and Linn Jackson County CCO, dba Jackson Care Connect 5 years Jackson  PacificSource Community Solutions - Central Oregon 5 years Crook, Deschutes, Jefferson,
    and partial Klamath  PacificSource Community Solutions -  Columbia Gorge 5 years Hood River and Wasco PacificSource Community Solutions - Lane 5 years Lane PacificSource Community Solutions - Marion Polk 5 years Marion and Polk Trillium Community Health Plan Inc. 5 years Lane, Clackamas, Multnomah,
    and Washington; partial Linn
    and Douglas Umpqua Health Alliance 1 year Partial Douglas Western Oregon Advanced Health, abn Advanced Health 5 years Coos and Curry Yamhill County Care Organization 1 year Yamhill, partial Polk and


    Christian Wihtol contributed to this report.

    You can reach Lynne Terry at [email protected].