Kotek Kills OHA Rate-Setting Transparency Bill

FamilyCare had pushed for the measure, arguing that even information that the Oregon Health Authority submits to the federal government is kept from the public, making it difficult to divine how to operate in the capricious rate-setting environment.

House Speaker Tina Kotek, D-Portland, has spiked legislation backed by FamilyCare to force the Oregon Health Authority to be more transparent with its rate-setting process, dealing a blow to the continued operation of the state’s second-largest Medicaid operator.

Senate Bill 233 would have cast daylight on the Oregon Health Authority’s rate-setting process and require the agency to make public any documentation that it submits to Centers for Medicare & Medicaid Services, as well as any documents, financial data and utilization data it uses to set its rates.

FamilyCare CEO Jeff Heatherington said that without SB 233 and a fairer rate-setting process, the Portland coordinated care organization may go out of business.

Much of the past documentation that SB 233 would have forced OHA to cough up may be revealed in litigation that FamilyCare has waged with the state agency, which has now entered the discovery stage. The Marion County Circuit Court rejected a move by the state to dismiss the lawsuit over the fairness of rates given to the CCOs.

“The transparency would let us know how they cook the books,” Heatherington said. “The rate-setting process is a mess. It’s contrived.”

The Centers of Medicare and Medicaid Services has approved the overall rates that the Oregon Health Authority submits for approval, but the state and some CCOs have disputed the way that the state cuts the pie among the 16 local Medicaid operators.

The CCOs, which act as health insurance companies for Oregon Health Plan members, are paid wildly different rates, even in the same geographic area, and the OHA has not shown FamilyCare or the public proof that those differences are rooted in riskier members at one CCO or another.

FamilyCare has been the biggest loser from the rate-setting process for the past three years. It is the only CCO that is paid less than $400 per member, while its Portland metro area competitor, Health Share gets paid roughly the state average, an average of $444 per member per month.

Under SB 233, the health authority would also have had to set a single risk score statewide, take into account flexible spending and upstream investments into social determinants of health, and then have its actuaries sign off on the actuarial soundness of each CCOs’ rates.

Thirdly, SB 233 set up a rate appeal process through a neutral, third-party -- the Department of Consumer & Business Services.

Kotek has not given any press conferences in the closing weeks of the 2017 legislative session, but she did issue a terse explanation to her opposition through a spokeswoman:

“After further consideration and consultation with various stakeholders, the Speaker determined the issue needed more work,” said spokeswoman Lindsey O’Brien. “She supports greater transparency, but ran out of time to craft the right language this session.”

Heatherington counters that he had the support of the other CCOs in the Coalition of a Healthy Oregon, and even brokered a compromise with his competitor, Health Share of Oregon. He said he had the support of a majority of legislators in both chambers but lacked one that counted more than 88 of the others -- Kotek’s, which he needed, since the speaker controls all legislation coming out of the House of Representatives.

The 2017 session will go down in the books as one of the absolute worst for transparency in Oregon, where big ticket items were not discussed in public before they were pushed for a vote and the Legislature killed a number of bills that would have given more scrutiny to government processes.

Opposition from a united House Republican caucus and a handful of Senate Democrats doomed Rep. Mitch Greenlick’s attempt to apply the Open Meetings Law to the operations of the quasi-public CCOs, which were specifically set up to manage the Medicaid program with community involvement.

Community involvement has been token at best in some CCOs, and one of the CCOs, Trillium Community Health Plan in Eugene, was sold to a large out-of-state Medicaid insurer for $129 million. Trillium failed at different times to provide access to primary care for all Medicaid members in its coverage area and paid primary care providers less than the state average -- potentially spending less on care in order to maximize the value of the company for the sale to Centene.

Greenlick’s push to open up CCOs was supported by Eugene Democrats including Rep. Nancy Nathanson and Rep. Paul Holvey, but he was critically opposed by the Coalition of a Healthy Oregon, which includes Trillium and is one of the largest contributors of campaign finance money in the state. That money undoubtedly had a profound influence on its defeat.

Senate Democrats also blocked a big prescription drug deal from Rep. Rob Nosse, D-Portland, which would have forced pharmaceutical companies to explain why their prices are so much higher in the U.S. than they are in every other country.

And when it came to passing major tax legislation, the Legislature acted like one of the CCOs -- blocking the public from its deliberations and hashing out the details of the $670 million provider tax for Medicaid in secret with healthcare industry players who profit from the expanded Medicaid system and receive a return on investment for the taxes they pay.

Supporters of more government transparency should not lose heart, however. The Sunshine Committee Law, House Bill 2101, which will overhaul state public records and examine the plethora of excuses the government can give to keep records secret, passed out of the budget subcommittee on general government on Thursday.

Reach Chris Gray at [email protected].

News source: