PacificSource Gains 2 New Medicaid Contracts But Still Has To Seal Deals With Providers

PacificSource is a big winner in the next round of Medicaid contracts which were announced Tuesday.

The Oregon Health Authority said that it had approved PacificSource's existing contracts in central Oregon and the Columbia River Gorge area, where it enjoys monopolies, and granted the company two new contracts -- in Lane County and Marion and Polk counties.

Ken Provencher, PacificSource’s president and CEO, told The Lund Report he is pleased.

“We feel like the decision endorses our approach and the hard work we’ve done to not just complete the application but to do a lot of the up-front work to put a lot of the pieces in place in these regions that are new to us,” Provencher said. “We think it will enable us in these new markets to bring the approach that we’ve been successful with in central Oregon and the Columbia Gorge.”

PacificSource’s coordinated care organizations currently serve 48,000 members in central Oregon and 12,000 in the Columbia River Gorge area. 

The Salem-area contract will give PacificSource a monopoly in Marion and Polk counties, which are now under Willamette Community Health. That nonprofit is disbanding at the end of the year. It was supposed to be replaced by the newly formed Marion Polk Community Care. But the health authority rejected that company’s application. There are about 100,000 people in Marion and Polk counties on the Oregon Health Plan, which covers nearly 1 million statewide.

Residents can qualify for the plan if they earn no more than $1,436 a month if they’re single or $2,961 for a family of four. Members have to pay a monthly fee --  $100 a month in the Portland area -- but otherwise, the care is free.

Lindsey Hopper, PacificSource’s vice president of Medicaid, said the company plans to continue the same model it’s used in central Oregon and the gorge in its new regions. That model is centered on health councils that are made up of providers and other stakeholders. In Lane County, that includes the county,  Oregon Medical Group, Advantage Dental, the Lane Education Service District and others, Hopper said.

The councils are responsible for investing in health care reforms. Among them are so-called social determinants of health -- things like education and housing -- that have an impact on health outcomes. Under PacificSource’s system, the company banks a margin of 2 percent from revenue and gives the rest to the council to fund new ways of doing things.

“We cap our margin and return the rest to the council which determines how it should be invested,” Provencher said.

PacificSource’s margins in Lane County will depend upon the company lining up physicians, nurse practitioners and other specialists. PeaceHealth is the largest medical system in the area, and it supported Moda’s bid. It later made up with Trillium, The Lund Report revealed.

But the company declined to support PacificSource’s application even though it had the option of writing letters supporting multiple bids in Lane County.

Provencher said now that the contracts have been announced, it will contact PacificHealth.

“We will now reach out to PeaceHealth and build the kind of relationship we need to make this work,” Provencher said.

He said PacificSource also plans to work with Trillium yet it also needs to woo members from Trillium to remain viable in Lane County.

Under federal regulations, Medicaid insurers cannot advertise for members or try to recruit clients.

“What’s really essential is that we build and maintain a strong provider network so that members can see the providers that they’re currently seeing or that they wish to see,” Hopper said. “It’s incumbent on us to do a good job there.”

The Oregon Health Authority will assign members to CCOs this fall, based on who their provider contracts with. If a physician has a contract with Trillium and not PacificSource, for example, then that doctor’s patients will be assigned to Trillium -- or vice versa.

That puts the onus on PacificSource to seal contracts with as many providers as possible. Hopper said the company will be helped by its decades of experience in Lane County where it's worked since 1933.

You can reach Lynne Terry at [email protected].

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