Independent Reviewers Find CCO Rate-Setting Process Actually Sound, Unbiased

SALEM--Medicaid experts from two independent firms have found the 2018 rates for Oregon's coordinated care organizations (CCOs) are sound, unbiased and generally consistent with state and federal rules. The state does not expect to change the 2018 rates Oregon pays CCOs to manage health services for more than 900,000 Oregonians who receive health coverage through the Oregon Health Plan. The Oregon Health Authority (OHA) plans to discuss the results with CCOs this week before finalizing next steps. 

Recently appointed OHA Director Patrick Allen engaged the firms to review the rate-setting process and answer questions from stakeholders and policymakers. The 2018 rates were recently submitted to the federal government in time for 2018 approval, and OHA reserved the ability to resubmit 2018 rates if the independent reviews indicated changes were needed. 

The independent reviews do not recommend changes to the 2018 rates. However, both reviews suggest OHA provide more documentation to the Centers for Medicare & Medicaid Services (CMS) to detail its rate development process. The firms also recommended that the agency provide more documentation about CCO loss ratios, profit margins and administrative costs. One review also recommends OHA address a potential outlier in a rate category for a southwest Oregon CCO. 

OHA staff intend to implement the recommendations by filing an addendum to CMS that provides more documentation of the rate-setting process. 

"We want OHP members, taxpayers and legislators to know if the CCO rate-setting process is sound or flawed," OHA Director Allen said. "These objective, third-party experts have given us the confidence to move forward and suggestions to improve the process." 

OHA will meet with CCO leaders December 6 to discuss the results and proposed next steps. The agency will review feedback from CCOs and announce its final plans for the implementation of 2018 rates later this month. 

OHA contracted with Lewis & Ellis, Inc., an independent Medicaid-qualified actuary, to review the current 2018 rate development methodology. The agency contracted with Manatt, Phelps & Phillips LLP, to review the 2018 rate development methodology against current CMS regulations and Oregon's 1115 waiver to validate compliance.