SALEM—On Monday the Oregon Health Authority (OHA) filed a motion to dismiss FamilyCare’s third lawsuit in two years against the OHA process for developing coordinated care organization (CCO) capitation rates.
For the past two years FamilyCare has stated in legal proceedings that its rates are too low compared to other CCOs – despite OHA’s 2015 rate revision at FamilyCare's request. To avoid additional litigation fees and to reserve taxpayer resources for Oregon Health Plan (OHP) members, OHA resolved those lawsuits with a settlement agreement, which included an agreement to not use the settlement as an offset against future rates.
Alleging that its rates are once again too low, FamilyCare’s current lawsuit seeks to force OHA to raise its rates for 2017. The crux of the lawsuit against OHA is that FamilyCare’s rates for 2017 violate the settlement agreement's terms regarding future rates. OHA’s motion seeks to dismiss FamilyCare’s complaint claim because nothing in FamilyCare’s complaint supports its claim.
Each CCO's rates are developed based on prior health care expenditures, CCO membership and pharmacy information provided by each CCO. Rates from prior years were not used in the rate development. Put simply, the 2017 rates were based on cost data from 2014 and 2015. FamilyCare has not alleged any factual basis to conclude otherwise.
“Oregon has been successful at bending the cost curve and saving over $1.4 billion since 2012 with the coordinated care model,” said Lynne Saxton, Director of the Oregon Health Authority. “This is largely because of our commitment to using global budgets for each CCO and maintaining a sustainable rate of growth in health care costs – currently set at 3.4 percent.”
OHA is committed to the health and well-being of over 1 million Oregonians who are served by the Oregon Health Plan, and that depends on the financial strength and stability of the CCOs that serve them. OHA works hard to ensure that all 16 regional CCOs – including FamilyCare – thrive in Oregon’s coordinated model of care.
Oregon and its actuaries are not responsible for business decisions CCOs make that affect their operating margin. The CCO model in Oregon is based on giving the CCOs a global budget and the responsibility for making their own business decisions to serve their members within that budget. This commitment is also reflected in recent renewal of Oregon’s Medicaid waiver in effect for the next five years.
“Not only has OHA been transparent about the rate development process for all 16 CCOs, the rates must also be approved as actuarially sound by the Centers for Medicare & Medicaid Services (CMS) each year," Saxton said. "CMS approved the 2017 rates for all 16 CCOs on March 28, 2017. OHA believes it is time to end this legal dispute and focus on the health and care of Oregon Health Plan members.”
