OHA Calls Back Another $41 Million in Overpayments from CCOs

The state had originally said it would not seek repayments from 2014 and 2015 for elderly adults who were misclassified as younger adults. But as political pressure mounted, OHA is now ordering its Medicaid contractors to square up their books.

The Oregon Health Authority is calling back $41 million in overpayments it made to the state’s Medicaid contractors in 2014 and 2015 due to classification errors.

The contractors, called coordinated care organizations in Oregon, are paid different rates for different categories of members, such as disabled people, children and adults. The errors occurred when the OHA assigned members to the wrong categories, leading to an overpayment.

Specifically, the state classified 41,000 elderly adults, who receive both Medicare and Medicaid, as able-bodied younger adults who receive only Medicaid, also known as the Oregon Health Plan. The CCOs, which run Medicaid plans, are supposed to receive much less money for the elderly adults because their medical costs are partly paid for by Medicare.

In October, the state announced that Oregon had overbilled the federal government $74 million between 2014 and 2016 due to these errors, which arose from faulty software from Cover Oregon, the state’s botched insurance exchange. The Oregon Health Authority’s annual budget is roughly $9.5 billion, making the funding error well below 1 percent of its total revenues.

At first, the state had planned to only ask the CCOs to pay back about $10 million they were overpaid in 2016, but political pressure mounted for Gov. Kate Brown to demand repayment from the CCOs for the excess money granted to them in earlier years. OHA Director Pat Allen also said that it is likely Medicare also owes Oregon money, since the state had been paying claims for the federal program.

In January, Rep. Knute Buehler of Bend, who is Brown’s probable Republican opponent in the November election, called for the rest of the $74 million to be collected from the CCOs. The final figure appears to be less than the full $74 million, or roughly $51 million. Buehler had also introduced legislation to order OHA to recollect that money, but his bill went nowhere in the Democratic-controlled Legislature.

Included in the new list of $41 million in Oregon Health Plan overpayments is $3.7 million from defunct Portland CCO FamilyCare, which stopped operation in February but remains locked in litigation with OHA. FamilyCare alleges the state favored its competitors, deliberately underpaid the organization and forced it out of business.

The biggest payback will be from FamilyCare’s main competitor, Health Share of Oregon, which is easily the largest CCO and has been ordered to repay the state $11 million. FamilyCare had been the second-largest CCO in Oregon, but it was overpaid less than two other CCOs.

Trillium Community Health Plan in Eugene owes the state $4 million and Willamette Valley Community Health in Salem owes the state $3.8 million. Eight other CCOs were overpaid in excess of $1 million.

The state’s dental care organizations for Medicaid also must pay back the state for excess payments, although these recoupments are quite small, ranging from $384 at Willamette Valley Dental Group to $19,000 from Advantage Dental.

Reach Chris Gray at [email protected].

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I think I recall that the CCOs in Oregon are for profit.  Is that true?  Are they all the same in that way?  Thamks for the good journalism, Chris.  I thought it was good of you to include the percentage information.  Good reporting!

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