Skip to main content

Oregon Health Authority Rewards CCOs With Millions But Top Scorer Gets Booted

PacificSource fared well but so did PrimaryHealth of Josephine County, which came out on top in the grants but failed to win another CCO contract.
October 4, 2020

In its continuing push to improve the health of Oregon’s roughly 1 million Medicaid members, the Oregon Health Authority has handed out cash awards totaling $160 million to all 15 of the Medicaid insurers operating in the state last year.

Some coordinated care organizations were bigger winners than others in the so-called “quality pool distribution” that rewards insurers and providers for progress they make meeting highly specific targets, from increasing dental sealants for children to better birth control for women who are at risk of unintended pregnancies.

The award money for 2019 comes as the state works to revamp the annual cash awards for 2021 and beyond, with greater emphasis on “health equity” and on social and demographic factors affecting health.

The agency said it is developing new measures that focus on health disparities that have become more evident during the COVID-19 pandemic. “Measures will focus on nutrition and physical activity, language access to culturally appropriate care, kindergarten readiness, and social determinants of health,” the statement said.

But the state said it also will continue to press coordinated care organizations, or CCOs, - the insurers that handle Medicaid members - to improve traditional health care services.

The awards represent a small sliver of the roughly $5 billion the state channeled to CCOs to pay for health care for Medicaid members in 2019.

The biggest winners, who were considered to have done the best job of meeting performance goals, included CCOs in the Bend region and the Columbia Gorge, both of which are part of the PacficSource insurance business, as well as two small independent CCOs covering Douglas and Yamhill counties.

Ironically, though, the best-performing CCO, PrimaryHealth of Josephine County, is shutting down this year after failing to win a new Medicaid contract for 2020 to 2025 from the Oregon Health Authority. In refusing to grant the long-term contract, the state said Grants Pass-based PrimaryHealth, a for-profit corporation, lacked sufficient reserves and was financially shaky. PrimaryHealth’s members, numbering about 10,000, have been transferred to other area Medicaid insurers. 

PrimaryHealth said the termination was unfair, in part because it had scored so well over the years on its performance and its service to members, especially in the annual awards. Its most recent one, for 2019, was $2.8 million. That underscores how an insurer can do a great job of serving members, yet still fall out of grace with the state. PrimaryHealth met 17 of the 19 health care improvement measures set out by the Oregon Health Authorityand all four “challenge” measures.

At the end of the race for the cash was Trillium Community Health Plan, which serves Lane County. It met just 11 of the 19 improvement measures and one of the challenge measures. Also near the bottom were giant HealthShare of Oregon, which serves the tri-county Portland area, and Cascade Health Alliance, which serves the Klamath Falls area.

Under state rules, the insurers must share the “quality pool” money with health care providers, but the state doesn’t specify a split.

The state picks goals for insurers and providers that normally they might ignore. For 2019, they included lowering hospital emergency department use by members; increasing physical, mental and dental assessments of children in foster care; improving immunization rates among children; and reducing tobacco use.

Motivated in part by the availability of the money, insurers and providers collaborate to come up with ways to make progress, said Jeremy Vandehey, director of the authority’s Health Policy & Analytics Division.

“We want to identify (health areas) where there is not already a financial incentive, or (health improvement) is not happening on its own,” Vandehey said.

For example, absent the incentive money, there is no special motivation for insurers and providers to focus specifically on increasing health care assessments of children in foster care, Vandehey said. “But the (quality pool money) did that,” he said.

The state has steadily ramped up the amount of money at stak. A half-dozen years ago, the state started at 1% of the total amount of funding for Medicaid insurers. By last year, the amount rose to 3.5%, and for 2020, the state is moving it to 4.5%, he said.

The money pales to the amount coordinated care organizations receive for members, which averaged about $5,000 per Medicaid member in 2019. The quality pool money amounted to $301 per member for the PacificSource CCO covering the Bend area, and $290 per member for the PacificSource company covering the Columbia Gorge area. For Trillium in Lane County and Health Share in  the Portland area, the payment amounted to just $153 per member.

Still, Vandehey said studies show that without the incentive money, insurers and providers make “no improvement (in the targeted areas) or sometimes even backtrack.”

The “quality pool” awards give top-scoring CCOs something to crow about.

PacificSource’s Columbia Gorge CCO earned $3.4 million and noted that it channels the entire amount to health care providers and health improvement networks. The CCO met its performance targets on 16 of 19 quality measures. The CCO noted that it scored the highest in the state on childhood immunization and childhood developmental screenings.

“The engagement, collaboration and hard work of the health care providers and staff in our region is outstanding,” said Elke Towey, director of the Columbia Gorge CCO.

Insurers who did poorly in 2019 can vow to improve.

Health Share said it has “historically done very well on state incentive measures,” but that it had trouble hitting the 2019 standards, as did some other CCOs. 

“The funding from OHA continues to serve as an important motivator for CCOs and providers to improve performance on critical measures,” said  James Schroeder, Health Share’s CEO. “We look forward to continued transformation and meeting and exceeding these benchmarks in future years.” 

Each year, as CCOs generally meet the quality pool standards, the state ratchets up the bar, requiring, for example, more immunizations, better diabetes control, and more preventive dental care.

The standards next year are likely to require the coordinated care organizations and their contracted providers to meet health equity goals, which is a new focus of the health authority. So far, the only specific new measure on a draft of the 2021 goals is increasing the number of health care visits that use an approved language or sign language interpreter. The draft also lists increasing well-child visits for children 3 to 6 years old, under the category of kindergarten readiness, another health equity goal. The state added that measure in 2020.

The authority doesn’t plan to set too many new goals, however.

“The trick has always been to pick meaningful metrics, but not have so many that you lose focus,” Vandehey said.

You can reach Christian Wihtol at [email protected].