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Oregon Health Authority, Medicaid Insurers Haggle Over Vaccination Incentive Money

Facing pressure from coordinated care organizations, the health authority reduces its COVID-19 vaccination-rate goals for Medicaid members.
June 14, 2021

The Oregon Health Authority is paring down its COVID-19 vaccination proposal that would give the state’s Medicaid insurers incentive money for 2021 based on boosting the vaccination rates of their members.

The reworked proposal, not yet approved, is less ambitious than two earlier drafts by the state, but officials hope it is the final one. Medicaid insurers -- known as coordinated care organizations -- would have an easier time hitting the goals. However, the reward money at stake in the vaccination incentive would be much less: under $25 million, compared to the nearly $100 million the state initially wanted to offer as vaccination-rate improvement rewards.

The money would go toward the work of vaccinating Oregon’s Medicaid members -- 1.3 million people, or about one-quarter of the state’s population. It’s a segment of the population with some of the lowest vaccination rates in the state, and the health authority is prodding insurers, health care providers and others to focus on increasing the rates.

The haggling over the incentive payments reflects the sentiment among many CCOs that getting Medicaid members vaccinated is extremely hard.

For various reasons, from vaccine hesitancy to lack of transportation and lack of computer access to schedule appointments, Medicaid members around the state have been much slower than the population at large to get vaccinated. While the state is closing in on a 70% vaccination rate for adult Oregonians, the vaccination rates for Medicaid members 16 and older in many rural parts of the state languishes at 25% to 30%.

The state’s new proposal would designate slightly less than one-eighth of the annual incentive funding for CCOs for the COVID-19 vaccination metric. To qualify, CCOs would have to achieve either a 70% vaccination rate for their members or hit a CCO-specific target that would be based on progress from the baseline vaccination rate of its members.

The state is watering down the vaccination-driven incentive cash after CCOs complained the state’s initial plan was unrealistic. The state initially proposed that Medicaid insurers must vaccinate at least 80% of their population age 16 and older by Dec. 31 in order to qualify for all the incentive funding. Also, the state initially suggested that nearly $100 million -- or nearly half of the annual incentive funding that coordinated care organizations would be slated to receive for 2021 -- go for the COVID-19 vaccination metric.

Coordinated care organizations responded that the 80% vaccination rate was unrealistic, especially in rural areas with high vaccine hesitancy. Health care executives also opposed putting such a large share of the incentive funding toward the vaccine metric.

The state awards incentive funding to CCOs each year based on how they perform in designated targets, from diabetes monitoring to behavioral health screenings. In October, CCOs received about $160 million in incentive money for their work to hit targets in 2019.

Sixteen CCOs serve different regions of Oregon. Medicaid insurers pushed for a vaccination metric that would take into account each CCO’s challenges, including its starting point in the push to vaccinate more people.

Preliminary estimates put the total incentive money for 2021 at $200 million. The state’s initial proposal would have put nearly $100 million on the line for the vaccine metric. 

The estimated $200 million incentive money anticipated for 2021 is just a small portion of the roughly $5 billion the insurers will receive for the year. But the incentive money is valued highly by the insurers because it is extra cash that they can scramble for, on top of the standard per-member monthly payment they receive from the state. The insurers typically share the incentive money with health care providers that work to meet the incentives.

Oregon Health Authority officials are close to the finish line with the proposal.

“We do not anticipate seeking further feedback on the measure,” OHA spokesman Jonathan Modie said Monday in an email. “We expect to have the measure finalized at the end of this week after walking through changes with CCOs.”

Third Proposal May Be Final One

The latest proposal is the third draft that the Oregon Health Authority sent to CCOs for input. The authority sent it to CCOs on Friday and officials are “hoping this is the final version,” Modie, the spokesman, said.

Here’s how it would work: 

Due to the urgency of the vaccination work, the COVID-19 vaccination metric is bypassing the authority’s usual process that creates new metrics in the incentive program, which can take a couple of years going through committees. Instead, the authority is setting up the metric administratively and calling it “emergency outcome tracking for CCO panel vaccination” instead of an official CCO metric. 

The money will come from the existing pool of incentive dollars. So, any dollar put toward the vaccine metric is a dollar taken away from the pool that rewards CCOs when they hit other health incentive targets. 

CCOs can qualify for the funding -- or a portion of the funding -- in several ways. They qualify for 90% of their portion of the vaccine metric dollars if they achieve a 70% vaccination rate of members age 16 and older. 

Alternatively, an insurer can qualify for 90% of their vaccine metric dollars if they make progress in their vaccination rate using a formula set by the state that takes the CCOs April 1 vaccination baseline. To qualify for the 90% funding level, a CCO also would need to reach that vaccination rate among each race and ethnicity group. A race or ethnicity needs to have at least 50 members in order to be a separate group within the metric. 

CCOs can get partial funding if they achieve the overall vaccination goal and have a lesser rate among each race and ethnic group.

To qualify for the remaining 10% of the vaccine metric funding, CCOs will need a vaccination rate of at least 42% among 12-15-year-old children. The vaccine became eligible for this group on May 13. Due to the small number of members in that group, the state does not break out race and ethnicity separately, the proposal says.

CCOs Weigh In

Health authority records show the latest proposal dropped the vaccination rate bar even lower than the agency’s second draft of the proposal, which went to CCOs for feedback in late May and early June. 

Specifically, the third proposal made it easier for each CCO to meet targets based on their improvements from the April 1 baseline.

Records show that CCOs pushed back against the tougher standards set out in the second proposal, and asked to qualify for funding for smaller, incremental improvements in vaccination rates.

The vaccination improvement formula set out in the second proposal  “negatively impacts the CCOs that operate in counties that have struggled with vaccination rates thus far,” wrote Sean Jessup, president of Eastern Oregon CCO, in a June 3 email to Oregon Medicaid Director Lori Coyner. “Unfortunately, we do not believe we will be able to even come close to meeting the targets in the revised proposal.”

As an alternative, Jessup suggested that the health authority reward CCOs when they make small, incremental improvements in vaccination rates. 

“These improvements would be a significant success and something we believe may be achievable,” Jessup emailed.

EOCCO has nearly 61,000 members in a vast swath of 12 counties in rural Oregon -- the most geographic territory of all the CCOs.

Jessup also candidly assessed Umatilla County’s prospects of boosting its vaccination rate, based on conversations with local health departments. The county has one of the lowest general-population and Medicaid vaccination rates in Oregon. 

“The lowest performing counties, including Umatilla County, believe achieving a 45% vaccination rate for the entire eligible county population 16+ would be an unbelievable achievement,” Jessup wrote. The current vaccination rate for that population in Umatilla is 39%.

Jessup’s suggestion of rewarding small, incremental increases didn’t make it into the state’s third draft proposal. 

Other CCO feedback did, though. 

For example, AllCare Health CCO chief compliance officer Cynthia Ackerman wrote the health authority that its suggested 50% vaccination rate for children 12-15 is “unattainable in our region,” given historically low vaccination rates. The health authority dropped that to 42%. 

AllCare Health CCO has about 54,000 members in Curry, Douglas, Jacson and Josephine counties.

Ackerman also raised concerns about the proposal setting individual targets for race and ethnicity groups with only 30 members or more in a CCO. With that low a figure, the focus would shift to specific individuals, Ackerman wrote, “which could be viewed negatively” in those communities.

The health authority bumped that up to 50 people instead.

However, the second proposal mirrors the final one in significant ways, such as setting a 70% vaccination rate as the overall goal, and putting less money towards the metric. CCO officials unanimously praised the change to put less money towards the vaccination metric.

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