Oregon Health Policy Board Begins Process for Rate Review, Other Reforms

Regulatory and legislative recommendations will be finalized by the end of the year.
The Lund Report

July 3, 2013—The Oregon Health Policy Board is beginning a six-month process to develop recommendations to reform various parts of Oregon’s healthcare system to follow federal requirements in the Affordable Care Act, expand the coordinated model of care being pioneered by Oregon Health Plan providers, and bolster Oregon’s insurance rate review process.

The work is being done at the request of Governor John Kitzhaber, who sent a letter on June 3 asking the board to develop recommendations for possible statutory and regulatory regulations designed to reduce the costs of the state’s healthcare system, decrease health premiums, and hold insurance companies accountable.

“We have an opportunity to create an environment for the commercial marketplace in Oregon that moves toward one characterized by models of coordinated care and growth rates of total healthcare expenditures that are reasonable [and] predictable,” Kitzhaber wrote in the letter.

During its meeting earlier this week, the board reviewed a timeline and a provisional work plan to begin the process.

In the next few months, it will begin working with Diana Bianco, the principal consultant of Artemis Consulting, who facilitated the development of the board’s business plan for the Oregon Health Plan’s coordinated care organizations in January 2012. In addition to looking at what other states have done to strengthen their rate review process, the board and Oregon Health Authority staff will also conduct research into contracting requirements for hospitals and insurers, and affordability standards.

The board is expected to get its first glance of possible models for rate review in September, and accept public testimony. Draft recommendations will be considered in November, and the board will vote on finalized recommendations in December, then deliver those recommendations to the Governor and Legislative leadership.

“[It] is a significant amount of work in a very compressed time frame,” said Dr. Bruce Goldberg, director of the Oregon Health Authority,” during the meeting.

The board approved the charter for a new workgroup, called the “Coordinated Care Model Alignment Work Group.” Its main responsibility is to develop recommendations for how PEBB, OEBB, Cover Oregon—the state’s health insurance exchange, which will be come operational in January 2014—can create and offer coordinated models of healthcare to the people for whom they provide healthcare benefits.

By November, the workgroup is expected to submit its recommendations to the Health Policy Board; however, the workgroup will not be responsible for approving the recommendations ultimately adopted by the board. Goldberg will appoint the workgroup’s members.

PEBB and OEBB have been thinking of ways to incorporate a coordinated model of care into their health plans for at least a year. PEBB intends to release a request for proposals this fall, opening the bidding process to insurers and coordinated care organizations. Higher priority will be given to proposals that emphasize preventative care and cost effective ways to promote patient involvement and patient centered care. Those plans that are selected will begin covering school teachers and public employees in January 2015.

Eric Parsons, the board’s chair, said the board will likely leave it to the work group to determine the best ways for PEBB and OEBB to integrate coordinated care, and play a more hands-on role when it comes to rate review and making the process more transparent.

Other states are also using their rate review process to drive health reform. In Rhode Island, the Office of the Health Insurance Commissioner released a bulletin in May that prohibits enforcing non-disclosure clauses in provider contracts. That forces insurers to disclose the cost of various healthcare services, giving physicians and other providers the ability to refer patients to less expensive and more effective services.

“There are significant variations in the price of healthcare services that are not attributable to the quality of the service, and that the disclosure of those price variations is necessary to enable providers to make cost-effective clinical referrals, care coordination, and other treatment decisions,” the bulletin reads.

Rhode Island’s tougher rate review process also enables the state’s insurance commissioner to pressure insurers to include improved primary care and cost-effective and evidence-based programs, such as medical homes, in their contracts.

During the presentation at the Health Policy Board, there was little discussion about Rhode Island’s rate review process, but some board members expressed concern about the tight timeline.

“I don’t have a sense of where the specifics are headed,” Dr. Joe Robertson, president of Oregon Health & Science University, said. “I’m very concerned about how this can be disseminated in this amount of time.”

To read John Kitzhaber’s letter, go here.

To read the bulletin issued by Rhode Island’s Office of the Health Insurance Commissioner, go here.

Amanda Waldroupe can be reached at awaldroupe@gmail.com.

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