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Health Care Industry Voices Concerns Over State’s Medicaid Plan

Stakeholders wonder how the state’s next Medicaid plan will be funded and whether its goals are sustainable amid workforce shortages.
October 13, 2021

Oregon’s proposed five-year Medicaid plan has lofty goals and concepts. They include expanding members’ access to care, making the health care system more equitable and increasing flexibility in how money can go toward quality of life needs that can influence overall health, like housing and green spaces.

Heavyweights in the health care industry, including coordinated care organizations, support much of it, especially the plan’s focus on equity in health care. But the industry is pushing for more answers and has some concerns about the state’s draft Medicaid plan for 2022-2027, records show. In particular, they question where the money will come from to fund new programs and staffing.

Coordinated care organizations — the entities that insure Medicaid members — behavioral health providers and hospitals have weighed in on the initial concepts in Oregon’s proposed five-year Medicaid plan, also called a waiver. In 53 pages of feedback, health care companies, advocacy groups and industry representatives provide a candid assessment of where Oregon’s health care industry needs to go — and potential blind spots in the proposed plan for the state’s roughly 1.34 million Medicaid members. The Lund Report obtained the health care industry’s feedback on the state’s Medicaid proposal concepts through a public records request. 

Earlier this year, the Oregon Association of Hospitals and Health Care Systems prodded the state for more details. 

“Throughout these concept papers, whether around the global budget or the health equity zones, there is a lack of detail, which makes it difficult to interpret how (Oregon Health Authority) is viewing this policy and creates challenges for hospitals and others in providing meaningful feedback,” the hospital industry’s trade group wrote to the health authority.

Oregon officials are still working on the five-year plan and will release another draft with more details in early November. From there, they will negotiate its terms with the federal Centers for Medicare & Medicaid Services before Oregon’s existing waiver expires in June 2022. 

Lori Coyner, the state’s senior Medicaid waiver advisor, said the health authority has “actively solicited input” from a range of people. 

“We have considered all the input that we received,” Coyner said in a statement. “We have made adjustments where it was appropriate, especially if the adjustment furthered our goal of using the waiver renewal to create a more equitable system of health. During upcoming public comment on the application, we will solicit and consider still more input, and we look forward to more engagement with interested parties, community members and Oregon Health Plan members.”

The waiver is key because it lets states use federal Medicaid funding in ways that go outside the scope of the federal cookie-cutter model of Medicaid. For example, in 2012, Oregon’s Medicaid waiver allowed the state to set up coordinated care organizations. 

About 1.34 million Oregonians are on Medicaid, a program that provides medical coverage to people if their income falls below certain thresholds. That’s about 30% of Oregonians.

Many commenters questioned whether the state has the money to fulfill its expanded goals for Medicaid. About three-quarters of the roughly $8 billion the state spends annually on insuring Medicaid members comes from federal coffers; the rest comes from the state.

Here’s a look at the feedback from the health care industry:

Behavioral Health Care 

PacificSource, a Springfield-based CCO, reminded Oregon Health Authority officials of a 2020 Secretary of State’s audit that found the children’s behavioral health care system is fragmented and siloed.

“While providing care for all members of the Oregon Health Plan is paramount, we believe that earlier interventions and care coordination for our youth could serve as a central strategy for meeting the

administration’s goal of eliminating health inequities,” the CCO wrote in its letter to the authority. 

PacificSource, echoing concerns throughout the industry, said worker shortages pose a threat to goals of providing adequate mental health care for children. This comes in the context of a state proposal to keep children enrolled in Medicaid for five uninterrupted years. 

“We share in the belief that children must receive appropriate mental health care,” the group wrote. “We would ask how this idea works with the proposal to maintain enrollment for children uninterrupted for five years.”

The group added that “without ensuring that the Oregon Health Plan can accept dramatically more patients,” the proposal may not ensure children rapidly receive care. 

“Oregon needs a concerted effort to invest in workforce recruitment, retention and development,” the group wrote. 

AllCare Health, a Grants Pass-based CCO, raised concerns about how Oregon will fulfill its stated goal of increasing access, including pharmacy services for people with behavioral health conditions.

That step, AllCare wrote, “generated concern among stakeholders because increased access to services assumes adequate and culturally appropriate mental health providers. However, in many communities available resources are inadequate to handle current crisis caseloads.”

AllCare said the state’s description of that goal, called Step 3, “does not include a plan for providing or funding much needed workforce development. Step Three also troubled stakeholders because it offers no solution for programs that are too often failing, and places an unreasonable burden on CCOs alone.”

Other aspects of behavioral health care proposals drew praise. The Oregon Council for Behavioral Health in its letter, said it supports the state’s goal of a consistent, reliable funding stream for peer support services through the waiver. Peers in the behavioral health workforce can work closely with clients and offer them perspectives and advice based on their life experiences, such as overcoming addiction. 

They are already utilized in Oregon, but funding them can be difficult. 

“A reliable funding source would sustain and support the development of equitable access to peer services across the state, and provide the opportunity to support equitable living wages for this critical and diverse workforce,” the council wrote in its letter to the state.

Cost Growth Target Concerns 

PacificSource also wants nuance added to the state’s draft paper, saying it “seems to imply an inevitable reduction in the rate of growth (of spending on Medicaid) to 3%.”

That’s tied to the state’s cost-growth target reduction efforts, which have the goal of curbing per-capita health care spending to 3.4% annually and then to 3% after 2026. 

State officials hope to negotiate with the federal government for a formula that will provide Oregon with some of the savings the federal government would receive through efforts to limit the growth of Oregon health care costs.

The state hopes that providers and health care insurers will be able to meet the cost-growth limits in part by rooting out waste and inefficiencies.

PacificSource reminded state officials that at this point, the long-term 3% growth rate is aspirational and not a formal state recommendation. 

“We believe that the concept paper (and the plan) must take into account the real possibility that the 3% target is not a given, and unforeseen events may influence whether or not a future successor committee will recommend that particular target,” PacificSource wrote. “Because this number seems important to determining the amount of savings recaptured for community investment purposes, we ask that the concept paper be amended to reflect this important nuance.”

High Drug Costs Eyed

The Coalition for a Healthy Oregon asked the state to consider, for an unspecified period of time, not counting high-cost pharmaceuticals under the 3.4% rate of growth cap. The coalition represents several CCOs and providers, including  Advanced Health, AllCare Health, Cascade Health Alliance, InterCommunity Health Network CCO, Trillium Community Health Plan, Umpqua Health Alliance and Yamhill Community Care.

“Given the effect of pharmaceutical drug prices on cost growth in the Medicaid system, we need a way to deal with this, especially as a safeguard to protect the global budgets concept,” the group wrote.

CCO Oregon, another group that represents CCOs, urged a similar action for high-cost drugs, usually those that don’t yet have a generic equivalent on the market.

“Achieving approval for a true global budget at 3.4% rate of growth is a goal for the OHA, CCOs, and our provider partners,” the group said. “High-cost pharmaceuticals and therapeutics can skew the overall cost and rate of growth for the OHP and CCOs.”

The group said its goal is quality care without being penalized for high-cost drugs.

Health Equity Zones Scrapped 

Oregon Health Authority officials have backed away from an earlier initial concept that would have put so-called “health equity zones” in place for communities to determine funding priorities.

Instead, the authority is moving forward with a central focus on equity. 

Coordinated care organizations, which are assigned to regions, voiced strong concerns that “health equity zones” would create silos and bureaucracy. 

The Coalition for a Healthy Oregon said its members “are concerned about creating equity zones as described in OHA’s draft concept.”

“We understand communities want greater input in health equity investments,” the group said. “This can be done successfully within the CCO model without creating parallel structures. A parallel track could lead to a divergence of spending priorities, whereas community investments should be aligned in pursuing health equity.”

So did other providers.

“Providence appreciates the intent behind this concept but has concerns about the duplication of existing efforts and the potential to create more silos,” Providence Health & Services wrote to the authority. 

CCOs all already have community advisory committees whose purpose is to give community members a voice in CCO policy.

More Dental Access Encouraged 

Dental providers urged Oregon state officials to look for ways to invest in oral health and make it equitable across the state. Oregon Health Plan members can access dental care already. But it can be a struggle to access care or find providers. 

Providence Health & Services wrote: “There is a notable absence of oral health in the concept papers. Oral health is a critical component

of healthcare and should be considered throughout the policies, much as health equity and behavioral health has been considered.”

In an email, Manu Chaudhry, dental director for Capitol Dental Care, a major provider of care for Medicaid members, urged Oregon Health Authority officials to consider the big-picture needs like workforce and the infrastructure as it plans its waiver. This includes coordinating care across physical, behavioral and oral health needs, Chaudhry wrote.

“Addressing issues that impede the ability of those eligible to receive care needs to be a part of Oregon’s ongoing focus to ensure the continuing success of Oregon’s coordinated model and CCOs,” he wrote.

You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.