Oregon Medicaid Waiver Gets Good Initial Reception from Feds

The Centers for Medicare and Medicaid Services told state Medicaid Director Lori Coyner that it would work to sort out the major policy decisions for governing the Oregon Health Plan by the end of the year, finishing the work before Obama leaves office.

A high-level bureaucrat at the Centers for Medicare and Medicaid Services has given the state’s Medicaid waiver a warm reception, increasing the odds that the federal government will increase its investment in Oregon’s Medicaid transformation and allow the state to continue the coordinated care network while targeting upstream social determinants of health.


“I am excited about the progress that Oregon has made over the last four years and look forward to partnering with the state on a renewal to maintain Oregon’s momentum to continue to transform the Medicaid delivery system,” Eliot Fishman, the director of the state demonstrations group at CMS, wrote in a letter to state Medicaid Director Lori Coyner. “CMS is supportive of Oregon’s health system transformation and we have viewed Oregon efforts as a promising model.”


Crucially, Fishman promised that CMS would work through major policy considerations by the end of the year -- before President Obama leaves office. The waiver, if enacted, would apply to the state’s Medicaid program, the Oregon Health Plan, for five years.


The federal functionary also wrote enthusiastically about the new goals that Oregon wishes to take on -- improving the social determinants of health, health equity, and assisting tribal health programs. These new challenges are to be addressed in addition to controlling costs and further coordinating care and health from a primary home setting.


The state Medicaid system received $1.9 billion in federal investment in 2012 in return for holding down cost increases to 2 percentage points less than typical medical inflation, which has resulted in shared savings for the state and the federal government. The waiver calls for Oregon to receive additional federal funding while continuing to keep inflation below that of other states.


The CCO transformation was initiated by former Gov. John Kitzhaber, who was recognized nationally as a health leader. After his unexpected resignation in February 2015, Gov. Kate Brown has tried to maintain his vision and carry it to the next level.


“Oregon has worked incredibly hard to transform the delivery of health care in the state through coordinated care organizations,” Brown said in a statement, responding to the latest letter from CMS. "I am pleased the Centers for Medicare & Medicaid Services supports the work Oregon has done and acknowledges the progress we’ve made in the last four years.”

Oregon would like to be given an exception to price control efforts for expensive biological medications such as those used to treat Hepatitis C and cancer, as the state has little control over the price of these pharmaceuticals.

The new waiver calls for $1.25 billion for community health collaboratives, which will help the state go after the social determinants of health, such as stable housing and behavioral health.

An additional $750 million would go toward the hospital transformation fund, to help Oregon’s hospitals realign their priorities away from revenues from emergency departments and hospital admissions.

Oregon’s successes have caught the attention of the acting director of CMS, Andy Slavitt, who tweeted an article from the Bend Bulletin earlier this month that the state had cut its ER admissions rates in half since 2011, even as Oregon expanded coverage to an additional 400,000 people.

On Wednesday and Thursday, Oregon Health Authority policy director Leslie Clement gave her latest report to legislators on the status of the CCOs -- noting that just Cascade Health Alliance in Klamath County failed to receive its full quality pool bonus, which is given to CCOs after they have shown improvement in quality-of-care metrics.

Clement said CCOs have continued to lower emergency department utilization rates, but still need to improve on the number of people admitted to treatment after receiving a diagnosis of an alcohol or substance abuse disorder.

She also noted that while the Oregon Health Plan provides care to about 1.1 million Oregonians, about 67 percent of those households have an adult working full-time, and only 19 percent had no adult working  -- pushing back on the idea these people are not contributing to society.

“I think this is really important to highlight,” she said. “The majority of the population is working.”

These figures, compiled by the Kaiser Family Foundation, include households where only children have the Oregon Health Plan. Minors are eligible for OHP in households with an income up to 300 percent of the poverty line -- $73,000 for a family of four. The adult income cutoff in a four-member family is $33,500, unless the individual is pregnant or has a disability.

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