Medicaid Collaborative Emerges to Create Coordinated Care Organization in Tri-County

But UnitedHealth and ODS Health Plan also want to compete in the same market and have filed their letters of intent with the Oregon Health Authority

April 4, 2012 -- Transforming Oregon’s healthcare system took a decisive step forward when a collaborative led by Dr. George Brown signaled that it’s prepared to take the lead in caring for the Medicaid population in the tri-county area.

“This is something we must do together,” said Brown, CEO and president of Legacy Health System who’s brought together leaders of five competing health plans to create the Tri-County Medicaid Collaborative – CareOregon, FamilyCare, Kaiser Permanente, Providence Health Plans and Tuality Health Alliance.

On Monday, the collaborative filed its letter of intent with the Oregon Health Authority to become a coordinated care organization and provide physical and mental healthcare to more than 200,000 people on the Oregon Health Plan starting August 1.

But it’s likely to face competition from at least two health insurers – ODS Health Plan, which wants to expand into the Portland market and UnitedHealth, which has never participated in Medicaid, but is attempting to have a statewide presence.

Whether this new collaborative leads to a single health plan in the tri-county area is still unknown, Brown said, indicating that a strategic business plan that’s under way will consider this issue.

If a single health plan does emerge, CareOregon wouldn’t assume that role, Brown insisted. Instead, the collaborative would create a new organization representing all the participating organizations.

“CareOregon would not become the mega plan,” Brown said. “Right now we’re turning our attention to developing our business plan, looking at our projections, and our expectations are very high.”

FamilyCare, which has nearly 50,000 Medicaid members in the tri-county area, isn’t convinced that a single health plan is the best alternative, and refuses to end its Medicaid contract in the tri-county area once the collaborative gets under way. The other health plans are all on board -- CareOregon, Kaiser Permanente, Providence Health Plans and Tuality Health Alliance.

“We believe that our experience in the last 27 years puts us in an ideal position to work in the coordinated care organization world,” said Jeff Heatherington, CEO of FamilyCare. “We have a strong network of primary care providers including physicians and nurse practitioners and believe there needs to be a plan that represents them.”

Nevertheless, FamilyCare remains an active member of the collaborative. “Jeff has a very important and strategic role to play in this collaborative, and I’m thrilled that FamilyCare is at the table,” said Janet Meyer, interim CEO of the collaborative who’s been the executive director of Tuality Health Alliance for the past six years.

Brown also remains convinced that FamilyCare will come around. “They have expertise that will be very useful, and ultimately we’ll create an organization where FamilyCare could participate.”

As far as CareOregon’s role, Meyer shares the same opinion as Brown. “We’re still developing the organizational structure of the collaborative, but I don’t believe it was ever the intent that CareOregon would be the sole surviving health plan. That’s not CareOregon’s intent or the intent of the members of the collaborative.”

CareOregon, the largest Medicaid plan in the tri-county area with more than 158,000  members, is, however, providing office space for the interim staff members of the collaborative in the building it owns in downtown Portland.

Meanwhile, Meyer is convinced the new collaborative is capable of transforming care across delivery systems, managing collectively the global budget to get the best outcomes, and not creating more administrative costs or another layer of managed care.

“We need that,” she said. “We’re focused on best practice management and managing across delivery systems to bend the cost curve and achieve the triple aim.”

This is not about consolidating health plans but coordinated care across the community and having a system of care delivery with this population, she added.

“Creating a mega health plan is not necessarily going to get us to transformation,” Meyer said. “We need an integrative agency that works across communities to share this very limited budget and design new incentives, new payment methods and greater transparency and bring non-traditional entities in that have a huge impact on health status such as housing and employment support. There’s a lot of need in this population that doesn’t necessarily come from the healthcare system. We want to capitalize on peoples’ strengths and not duplicate overhead costs or disrupt services but continue caring for this vulnerable population.”

Other staff members include Dr. David Labby from CareOregon, chief medical officer; Jeff Butcher from Providence Health Plans, chief financial officer; Jon Hersen from Legacy Health, chief operations officer and Rosa Klein from Multnomah County Public Health, chief health strategy officer.

The interim project directors are Merrin Permut from Legacy Health, Erin Fair from CareOregon and Alyssa Craigie from Providence Health Plans.

The collaborative also includes representatives from Multnomah, Clackamas and Washington counties as well as hospitals in the tri-county area (Adventist, Legacy, OHSU and Providence), the Metro Area Health Centers, the Oregon Medical Association and the Oregon Nurses Association.

Throughout the state, the Oregon Health Authority received 52 letters of intent from healthcare organizations and insurance companies. By April 30, the first wave of technical applications are due, followed by May 14 for their financial applications. On May 28, the first coordinated care organizations will be certified by the Oregon Health Authority and will  become operational on August 1.


To review all the letters of intent for coordinated care organizations click here.

To read the previous story about thetri-county collaborative, click here.

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Janet Meyer is the perfect woman for this position. I look forward to the benefits this will provide our beautiful community with.