Oregon Legislature Approves Big Medicaid Changes

Gov. Kitzhaber plans to sign the bill at Portland appearance tomorrow
The Lund Report
June 30, 2011 – The Oregon Senate passed legislation last night that imposes monumental changes to the Oregon Health Plan intended to coordinate care and reduce costs.
House Bill 3650 passed the Senate 22-to-7 with all seven ‘no’ votes from Republicans. Sen. Joanne Verger (D-Coos Bay) was excused. The Oregon House passed the bill earlier this week by a vote of 59-to-1.
The bill aims to consolidate the managed care plans that currently administer the Oregon Health Plan into regional “coordinated care organizations” that can better manage chronic conditions and preventive care.
While the bill deals solely with Medicaid, Sen. Alan Bates (D-Ashland) said it has the opportunity to transform the entire healthcare delivery system in Oregon.  
“To do nothing, to just say ‘no’ and hope and expect our present healthcare system to fix itself or put more money in is not an option,” Bates said on the floor of the Senate. “We have too often made cuts without addressing the underlying issues driving those increased costs. This legislation directly addresses the underlying costs.”
By coordinating physical, mental, dental and substance abuse services, the state hopes to save an estimated $240 million in general fund dollars by the end of the 2011-2013 biennium. The bill also directs the Oregon Health Authority to craft a plan to include public employee benefit plans such as PEBB and OEBB at a later date.
Gov. John Kitzhaber, who’s planned to sign the bill in Portland tomorrow, said in a press release this morning that the bill begins to “shift the focus and financial incentives of Oregon's healthcare system from after-the fact acute care to prevention, wellness and community-based management of chronic conditions,” according to the release.
“The legislature’s action today is critical to ensuring that Oregonians get better health care at a lower cost, “Kitzhaber said. “The strong bipartisan support for this landmark legislation demonstrates how effective we can be addressing the real issues facing Oregon when Democrats and Republicans come together.”
The state faced an $860 million budget gap between available funds and costs for the Oregon Health Plan. Lawmakers reduced provider reimbursement rates, excluding primary care doctors, and increased the hospital provider tax to make up about $570 million of that gap with the remaining expected to come from reorganizing the program outlined in HB 3650.
“This is truly a dramatic reform that will lead to significant savings, better outcomes and better health for Oregonians,” Bates said.
Earlier this month, the governor signed Senate Bill 99 creating an Oregon health insurance exchange public corporation that expects to provide a central marketplace for purchasing health insurance. Nominations are now open until July 15 for the exchange board of directors and several work groups related to transformation. To learn how to apply, go to: www.health.oregon.gov.

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