OHA releases 2017 rates for Oregon’s coordinated care organizations

Today the Oregon Health Authority (OHA) released the 2017 capitation rates for Oregon’s coordinated care organizations (CCOs). The CCOs contract with the state of Oregon to manage and deliver health care to Oregonians on the Oregon Health Plan (OHP), the state’s Medicaid insurance program. OHA pays these capitation rates to CCOs on a monthly basis to cover OHP members for physical, behavioral and oral health services. 
“Oregon has made a commitment to Oregonians and the federal government to keep Medicaid costs under the national average, and to a yearly growth rate of 3.4 percent,” said Lynne Saxton, Director of the Oregon Health Authority. “The costs of Medicaid are borne by state and federal taxpayers and the CCO rates released today will help us keep that commitment, and most importantly provide the best health care possible to Oregonians on the Oregon Health Plan.” 
OHA contracts with Optumas, an actuarial consulting firm, to assist in the rate development. The 2017 capitation rates that were released today to the CCOs and to the Centers for Medicare & Medicaid Services (CMS) have been certified by Optumas as actuarially sound. The rates take into account several factors, including differences in regional costs, population disease risk and hospital reimbursement.

The rates released today show that Oregon is on track to meet its cost containment rate of 3.4 percent, with an aggregate 2017 rate increase of 3.2 percent. Oregon has pledged to keep cost growth to 3.4 percent through 2017 based on a commitment to our federal partner CMS, and as part of Oregon’s current Medicaid waiver. 
While the rates show that Oregon is on track for this year, the rates also provide insight into future challenges, one of which is pharmacy costs. With prices for many pharmaceuticals increasing, OHA is looking at solutions to keep pharmacy costs in check including collaboration with CCOs to align and negotiate for better prices for high-cost drugs.
A full list of Oregon’s 2017 CCO capitation rates are attached. Due to differences in population, the methodology matches payments to risk and mitigates the potential subsidizing between CCOs that would occur if each CCO received the same increase. 

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