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New Oregon 5-Year Medicaid Plan Would Expand Membership, Increase Innovation

Oregon Health Authority tentatively wants the taxpayer-funded insurance plan to help with housing, other needs, in addition to medical care.
June 2, 2021

Oregon’s Medicaid program could look very different if the state’s tentative plan to revamp and expand the program passes muster with federal officials.

The state would seek to boost member access not just to health care but to other services that shape a person’s health, like housing and food.

Also, for example, Oregon inmates would fill out applications for the Oregon Health Plan -- the state’s version of Medicaid -- a few weeks prior to their release and exit prison already enrolled in the plan.

The health plan is a key element of the state’s healthcare safety net, covering nearly 1.3 million members, most of them low income.

Under a draft of the new plan, Oregon officials want to see if the federal government will share any of the federal dollars the state projects it may save the U.S. government with the state’s 3.4% cap on the annual growth of per-capita health care spending.

These are a few ideas tucked into the concept papers that the Oregon Health Authority released on Tuesday as it prepares to apply for its customized five-year Medicaid plan, technically called a waiver. Oregon’s current waiver expires June 30, 2022.

When states want to tailor their Medicaid program, officials need to get approval -- a waiver -- from the federal Centers for Medicare & Medicaid Services to run it differently from federal regulations.  Oregon has had a waiver in place since 1994. In 2012, Oregon used its waiver to start the system of coordinated care organizations, insurance companies paid by the state to provide Medicaid coverage to residents.

At this early stage, the state is not spelling out how much the changes would increase Oregon’s Medicaid membership or how much they would cost state and federal taxpayers. The Oregon Health Authority pays an average of $6,000 per Medicaid member to insure them.

Some goals in the concepts are intended to save money in the long run. For example, when former inmates continue to get behavioral health care and addiction treatment after exiting prison, officials expect this would reduce recidivism. More broadly, when people have access to primary care, they are less likely to have untreated conditions that land them in the emergency room.

In each of its five-year waiver application cycles, the state has set different priorities. In this application, Oregon is emerging from a pandemic as the state and nation focus on racial equity. The disparities of COVID-19 hitting communities of color and the murder of George Floyd have put racial issues front and center.

The concept papers are just a starting point. State officials will draft another version and release it in July after getting more feedback from Oregonians and CMS. 

“At this stage, we’re trying to make sure this is all directionally correct,” Jeremy Vandehey, the Oregon Health Authority’s director of health policy and analytics, said Tuesday during a presentation to the Oregon Health Policy Board, which oversees the health authority.

The concepts are broad, with less of a nitty gritty focus on the mechanics of how each policy would work.

“We’re really trying to lay out broadly our vision and goals and strategies and (will) try to work through details internally and externally throughout the summer,” Vandehey said.

Here’s a look at the concepts under consideration:

Better Access To Coverage 

At any point in time, about 6% of Oregonians lack health insurance, but that masks another reality: people of color are uninsured at much higher rates. Twelve percent of Latinos and Hispanics are uninsured and 11% of native Americans and native Alaskans are uninsured. 

The state wants to eliminate the “churn” that happens when people become eligible for Medicaid and, within two years, they are bumped off the plan when their income rises or their circumstances otherwise change. That’s a concern because with their loss of Medicaid there’s a break in their care.

Oregon officials are looking at how to keep people in seamless coverage, whether by staying on the Oregon Health Plan despite the change in income, or quickly obtaining insurance coverage from a commercial provider on the marketplace.

The report noted that 35% of people without coverage of any type in 2019 were uninsured because they lost Medicaid coverage, according to the Oregon Health Insurance Survey. However, many people who lose Medicaid coverage because their incomes rose still cannot afford the high price of commercial health insurance.  

“Such disruption is stressful and can be life-altering as people lose access to care or established relationships with providers they trust,” the concept paper says. “Oregon aims to enhance coverage continuity for children and families, and to expand coverage for low-income Oregonians currently not eligible for OHP, when possible.”

Possible strategies include a five-year period of continuous eligibility for children to improve stability of coverage and care. Oregon currently exercises a federal 12-month period of continuous eligibility for children, with provisions to disenroll them when they turn 19 or move out of the state. 

The state paper says this would reduce the administrative burden on families and the state and lead to fewer members being dropped because their income rose.

The state also wants to allow people to continue to self-attest their income when they apply for Medicaid. Under this process, applicants don’t have to provide proof of income.

This allows them to start receiving coverage sooner, before they submit income documentation or the state verifies it through other databases, like food stamp applications. The state started the practice during the pandemic to enroll people in Medicaid quicker.

Also in the mix: policies that keep families with children covered together as a unit in Medicaid, even when there are increases in income. This could keep families covered at a higher income level so family members aren’t split up between two plans, such as Medicaid for some and commercial insurance for others. 

The concepts also support expanded coverage for low-income Oregonians who are unauthorized immigrants. Currently, lawmakers in the Oregon Legislature are considering a bill that would cover adults, regardless of immigration status. Oregon lawmakers in 2017 passed legislation that covers about 6,500 children who would otherwise be ineligible due to being unauthorized immigrants.

Help In Rough Stretches

Oregon health officials want to set up a system to help people going through transitions in which obtaining Medicaid is difficult. 

These include incarceration for youth and adults, homelessness, transitioning out of foster care and entering or exiting residential psychiatric treatment facilities. 

The health authority would work with partners and community organizations to determine the help and services that a person needs during these transitions, including medical needs and health-related needs like housing and help navigating the system so the person has a so-called “warm handoff” from one entity to another. For example, an inmate would get help enrolling in Medicaid up to 30 days before their scheduled release so they are covered immediately upon release.

The concept also calls for extending Medicaid eligibility for people in certain situations, such as in jail with charges pending and for a portion of their stay at Oregon State Hospital, the state’s residential facility that treats people with mental health conditions.

Another big piece of this is looking at non-clinical services that help a person’s overall health, like housing or other care outside the traditional Medicaid medical benefit. 

Lori Coyner, Oregon’s Medicaid director, said one example would be if a child with asthma frequently went to the emergency room with breathing issues. An example of such a non-clinical service would be mold abatement at the child’s house, Coyner said.

Coyner stressed the health authority doesn’t want to build housing, and CMS has been clear it’s not interested in going that far. Instead, the health authority wants to create a “suite of benefits that address housing needs and other health related social needs,” Coyner said. 

For example, the authority could help fund programs to help people with their deposits and applications for housing.

Increased CCO Accountability 

The state also wants to make coordinated care organizations more accountable with direct input from the communities they serve to make the health care system more equitable. To get there, the CCOs will need to “share power,” the paper says.

The state will need to develop new rate structures and revamp benchmarks that incentivize coordinated care organizations, the concept paper says. The state currently pays the state’s 16 CCOs based on how many Medicaid members each one manages.

Oregon’s concepts call for more spending that goes beyond clinical medical care. Currently, CCOs spend about 0.5% of their total budgets on health-related services, such as housing and food assistance, in contrast to conventional medical services. 

At the same time, however, the state’s Medicaid system has waste.

“Too many dollars are spent ineffectively and inefficiently, spurred by lingering issues in care delivery, coordinated care, overtreatment, and administrative complexity,” the concept says.

Oregon officials want to retool the system that holds CCOs accountable and pays them financial incentives to hit certain health metrics, such as diabetes treatment, birth control access and weight management counseling. 

The state’s concept calls for revamping the health metrics system, which paid coordinated care organizations about $160 million in October for reaching benchmarks in 2019. The state wants to revamp the metrics with a focus on equity. The concept doesn’t identify what those new metrics would be.

The state concept paper also says it’s necessary to craft “innovative rate methods” so that CCOs address the health-related social needs of the Medicaid population. With the current structure, the state report says, “CCOs still have too many incentives to rely on standard health care services, rather than be responsive to the most pressing needs for members and communities.” 

More Money From Feds?

The Medicaid waiver application looks for a creative way to pull more money from the federal government.

Under the “shared savings” concept, Oregon would attempt to be rewarded for the state’s anticipated savings from the Sustainable Health Care Cost Growth Target Program. Under that program, the state’s per capita growth of health care is expected to be held at 3.4% annually, which would cut the current growth in half. That cap applies to Medicaid and other payers. 

Oregon’s concept would seek a “shared savings” agreement with the Centers for Medicare & Medicaid Services that would reward Oregon at least a portion of the anticipated federal savings.

 The concept papers don’t outline how much funding this would entail. But total Medicaid savings due to the cost-growth target during the five-year waiver period are estimated at $350 million in Medicaid dollars, and twice that amount when factoring in savings for Medicare Advantage plans, which are partly funded by the federal government. 

At this point, it’s a broad concept that needs to be refined -- if federal officials are game. The report says the state and CMS would need to develop a way to calculate and track the savings. 

The state would plow the federal funding into a new pilot called “health equity zones.” Those zones would be geographic areas that focus on community needs and be different from coordinated care organization regions. 

The Oregon Health Authority would work with communities to identify how to distribute the money and resources to underserved populations and groups.

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