Oregon Health Authority Fights to Keep Right to Clawback CCO Money

The Oregon Health Authority has been working behind the scenes to block legislative reforms in a pair of bills that the House unanimously voted to imposed on the agency. Those reforms would prevent the health authority from actions toward coordinated care organizations that some CCOs said were undermining their efforts to transform the Medicaid system.

Rep. John Davis, R-Wilsonville, introduced House Bill 4107 to prevent any further clawbacks of money that the state has already made to the CCOs -- a controversial practice that was used last August to retroactively reset the budgets paid to CCOs; the biggest loser was Portland-area FamilyCare, from which the state demanded a repayment of $55 million, a bill the CCO has refused to pay.

But an amendment to the bill that the Oregon Health Authority has introduced in the Senate would give the agency until Dec. 31 to unilaterally clawback payments to CCOs that it has already disbursed for their global budgets

“They’re trying to codify their existing practices that we’ve been objecting to,” Davis told The Lund Report. “It’s exactly the opposite of what our bill is trying to do.”

By keeping its authority to claw back money till next January, the health authority would retain the power to do it again on the 2016 contracts, without needing federal approval. HB 4107 already provides an exception to allow the state to abide by federal law.

The Oregon Health Authority and FamilyCare, which is locked in a legal suit with the state agency, dispute who ordered the $100 million clawback to CCOs that was made last August; the state agency has said that the federal government told it to reset rates retroactively to Jan. 1, while FamilyCare has argued that the agency made much of that decision on its own.

While several CCOs, including Umpqua Health Alliance in Roseburg and All-Care Health Plan in Medford, have returned millions of dollars to the state agency -- money that was then redistributed to other CCOs -- FamilyCare has refused to sign on to the amended 2015 contracts which included the repayment of the $55 million.

“It was a very difficult situation for [the CCOs] to be in. They set budgets thinking that money was going to be there,” said Courtney Johnston, the lobbyist for the Coalition for a Healthy Oregon, which represents all three of the CCOs in question. “All we’re asking for in this bill is that rates be set up proactively.”

Sen. Alan Bates, D-Ashland, said he was particularly concerned about the state agency’s tactics with the Legislature. The Oregon Health Authority was given the opportunity to testify on these bills in the House Health Committee, but made only limited remarks. “If OHA had concerns about it, they should have brought them up in the House,” Bates said.

Instead, the agency appears to have waited until the bills passed out of the House before submitting amendments in the Senate that would nullify the legislation, evidently hoping for a more receptive audience from Senate Health Chairwoman Sen. Laurie Monnes Anderson, D-Gresham.

The Oregon Health Authority once again did not take the stand to defend its position before the Senate Health Committee; it instead submitted written testimony that Monnes Anderson read aloud.

In her written testimony, Health Authority spokeswoman BethAnne Darby argued that the agency’s amendment would clarify that the anti-clawback law does not take effect until next year, and said the current CCO contracts would be disrupted if the agency lost its clawback ability.

FamilyCare spokeswoman Cindy Becker, whose organization is fighting the amendments in the state Senate, said that continued authority was precisely the point of the legislation, since the CCOs were forced to accept the clawback caveat in their 2016 contacts. “The current contract allows for retroactivity, so that’s a problem,” she said.

The Senate Health Committee declined to adopt the agency’s amendments for House Bill 4141, which restricts the agency’s ability to change CCO service areas, but Monnes Anderson kept the amendments alive for House Bill 4107, which will have another hearing on Monday.

Sen. Jeff Kruse, R-Roseburg, has submitted his own amendment, which clarifies that the agency could order clawbacks under federal direction as well as federal law, but removes the authority otherwise upon passage of HB 4107. “It gets us back to the mission,” Kruse said.