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Oregon Bill Would Give Coordinated Care Organizations More Spending Flexibility

House Bill 3353 seeks to give coordinated care organizations ways to fund community programs and services
Oregon State Capitol in Salem. | RENAUDE HATSEDAKIS
April 7, 2021

Oregon lawmakers are considering a bill that would give coordinated care organizations more flexibility to spend money on programs to help people overcome disadvantages due to factors like their race, disability, ethnicity, gender, language or social class. 

House Bill 3353 hinges upon a simple principle: The state’s 15 coordinated care organizations that manage Medicaid coverage for Oregonians need more flexibility to pay for community programs and services that make health care equitable. The Oregon Health Authority pays coordinated care organizations to insure nearly 1.3 million people on Medicaid -- about 30% of the state’s population. The state’s Medicaid budget could be nearly $10 billion annually in state and federal dollars in the 2021-2023 cycle, which lawmakers are working on. That figure is based on Gov. Kate Brown’s two-year budget request. Three percent of that would be nearly $300 million annually.

The bill would let coordinated care organizations spend up to 3% of their budgets on programs and services to address health equity and disparities among disadvantaged groups. It would give them the leeway to develop programs to improve the overall health of the communities they serve, beyond just paying for medical care. 

The bill could open another chapter in the state’s efforts to provide equity in the health care system to different groups, such as communities of color, immigrants and others. In this case, Medicaid dollars could go to address, for example, social determinants of health like housing and food.

Each region’s coordinated care organization would have flexibility based on its specific needs.

For example, a CCO could designate money for enhanced payments for providers who offer culturally or linguistically appropriate services in their communities, such as interpreters at food banks. It could pay for housing or other services to help groups that struggle to access health care. The bill would require that 30% of the special spending go to leveling racial or cultural inequalities in health care, and 20% go toward behavioral health.

The House Health Care Committee heard testimony Tuesday on the bill without taking action. The committee could vote to send it to the House floor as early as Thursday. 

Passage in the Legislature is not the finish line. The bill would require the Oregon Health Authority to seek approval of the program from the federal Centers for Medicare and Medicaid.

The federal government provides about 70% of Oregon’s Medicaid funding, and the state must seek federal approval for changes.

CareOregon Backs The BIll

Representatives from CareOregon, which serves rural and Portland-area Oregonians on Medicaid, testified in support for the bill, which drew no opposition. The nonprofit company owns Jackson Care Connect, which serves 45,000 members in Jackson County; and Columbia Pacific CCO, which has 30,000 members in Clatsop, Columbia and Tillamook counties. CareOregon also manages behavioral health benefits for 300,000 members of Health Share of Oregon in the Portland metro region and medical health benefits of two-thirds of them.

The company said the bill presses forward with reforms that were stalled by the COVID-19 pandemic.

“Our vision is healthy communities for all individuals, regardless of income, or social factors. We write in support of HB 3353, as it starts an important conversation about innovation in the state’s 1115 Medicaid waiver,” Stefan Shearer, a public policy and regulatory affairs specialist for CareOregon, wrote to lawmakers.

For CCOs, a challenge posed by the bill is that they would have to continue to fund medical care for their members, while adding the new, equity-focused programs, all from the same pot of money.

Spending Plan Would Need Federal Approval

If the bill’s adopted, the Oregon Health Authority would have to include it on its Medicaid “waiver” application, a process carried out every five years. In general, states submit Medicaid waiver applications to seek permission from the federal government for more freedom in how they run the Medicaid program and funding. 

The Oregon Health Authority plans to finish its waiver application in early 2022 and negotiate an agreement with the federal government before Oregon’s current waiver expires on June 30, 2022. Waiver applications are a grueling process for states: They must prove they won’t spend additional money and demonstrate how the changes will help the health of the communities they serve. The state would have to demonstrate how, for example, providing housing creates measurable health care benefits.

Under the bill, the health authority would have an oversight committee to develop best practices and resolve disputes between coordinated care organizations and the authority about expenditures.

Brown’s budget proposal for 2021-2023 calls for spending $19.7 billion on the Oregon Health Plan, the state’s version of Medicaid,  with 73% of that, or about $14.3 billion, coming from the federal government. The rest comes from state sources, primarily $1.6 billion in general fund tax dollars as well as taxes on hospitals, tobacco products and insurers, among others. Medicaid provides health coverage to residents who qualify based on their income.

The top income limit is $1,468 a month for a single person.

Local Communities See Benefits

The bill is not a cookie-cutter program and recognizes that regions have different needs.

Jackson County in southern Oregon reflects that. The hard-hit county has faced the pandemic along with wildfires in 2020 that burned down more than 2,500 homes.

At the hearing, AllCare members from Jackson County told lawmakers of needs that the current funding model for coordinated care organizations cannot address.The All Care Health Jackson County Community Advisory Council gave lawmakers a list of programs that need long-term money: food and utility help, health and wellness services for low-income and Latino families, and help with hotel stays and case management for Ashland families displaced by the fires.

To recover, the region needs a solid foundation, said Nicole Witham, a school teacher and chair of the AllCare Health Jackson County Community Advisory Council. 

“Luckily our community pulled together and we have been able to be resilient to get through the immediate aftermath of these crises,” the council wrote lawmakers. “But the long-term economic, social and mental health impacts to our communities will result in more intense and complex needs for years to come. We are going to need to start building more robust systems of care to handle the very difficult years to come as our community copes with the long-term effects we have experienced.”

Heather Jefferis, executive director for Oregon Council for Behavioral Health, said the group representing more than 50 behavioral health provider agencies hopes the bill will make it easier for the agencies to recruit and keep workers. The council said creative funding and more resources are critical. Oregon consistently ranks last or near the bottom of states in its access to behavioral health services.

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