For-Profit CCOs Muscle Greenlick’s Reform Bill Away from House Floor
A coalition of for-profit coordinated care organizations and physicians groups, led by lobbyist Paul Phillips of Pac/West Communications, is pitting its clout against Rep. Mitch Greenlick’s efforts to require more transparency in CCO’s governing structures and to prevent them from booking millions in profits from tax dollars meant for Medicaid.
The collective might of these groups, which have spent millions of dollars over the past decade lining legislators’ campaign coffers, was enough to force House Bill 2122 from the House floor on Monday and off to the House Rules Committee, where the bill now faces an uncertain future.
The Oregon Health Authority has reported a $900 million deficit driven by increased Medicaid expenses, and Democrats have been trying to arm-wrestle Republicans and the business community to pay more taxes, but without the protections in Greenlick’s bill, new tax dollars meant to provide healthcare for the neediest could instead end up providing a return for Wall Street.
Phillips helped push the bill from the House floor to Rules by circulating an opposition floor letter through Rep. Cedric Hayden, R-Cottage Grove, the vice-chairman of the House Health Committee. The letter details only vague complaints about how the bill might stifle innovation and imperil the state’s Medicaid waiver with the Centers for Medicare and Medicaid Services.
House Speaker Tina Kotek, D-Portland, told reporters that a new, reasonable compromise would clean up the language protecting the CCO financial reserves from being taken out of the community while allowing for more for-profit CCOs if they file as B-, or Benefit, Corporations. She insisted that the bill would keep provisions requiring CCOs to allow public oversight of board meetings in their next contract.
B-Corps must file additional paperwork with the Secretary of State describing ways in which they plan to divert some of their profit to benefit the community. While these companies donate profits to charitable causes, it’s often primarily a method to reduce their tax burden and market their brand to consumers.
All-Care Health, a for-profit CCO in Southern Oregon, has reorganized itself as a B-Corp, an easy decision given its directive to provide social services as well as healthcare services to its low-income members.
But Republicans fought moving the legislation to Rules, meaning the bill may fall on a party-line vote in the House if it does return the floor. The Senate Republicans may be more receptive, given past support from Sen. Jeff Kruse, R-Roseburg, for greater transparency in CCO operations and his opposition to the demands from his local CCO that it be able to operate outside of public view.
Greenlick complained that he had already compromised several times with the for-profit CCOs, but he said they repeatedly go back on their agreements and increase their demands -- and he insinuated that Phillips and the Coalition for a Healthy Oregon were acting in bad faith.
Greenlick, the Democratic chairman of the House Health Committee, has tried to cast daylight on CCOs’ operations and to require them to abide by Oregon Public Meetings Law. Currently, despite being tasked with spending billions of dollars of public money to provide healthcare for the poor, CCOs bar the public from their meetings and have only token public participation in their decision-making process.
A Portland Democrat, Greenlick is also trying to protect a roughly $1 billion reserve that has piled up across all the CCO’s coffers, making them attractive targets for corporate acquisition by out-of-state for-profit companies, whom he suspects would be much less invested in providing quality healthcare and maintaining a strong role in the community than the current locally owned companies. If a CCO ever pulled out of the state, it may also be able to exit with its pile of reserves under current law.
The version of HB 2122 that passed the House Health Committee earlier this month protected those reserves by requiring any excess revenue to be invested in community health improvements in the social determinants of health. It also prohibited any new for-profit CCOs from coming into Oregon, while allowing the for-profit business model to continue for the local groups, which have been innovative in managing care for quality while eliminating waste and bringing down the cost of healthcare.
One CCO, Trillium Community Health Plan, has already been bought up by the Centene Corp., based in St. Louis. The sale, for $109 million, made Trillium’s local investors overnight millionaires. The sale price reflects Trillium’s potential profit, which would be derived from tax dollars diverted from Medicaid.
The controlling parties of several other CCOs have been rumored to be ready to sell out and yield dividends like their colleagues at Trillium.
Conspicuously, Health Share of Oregon and the nonprofit CCOs aligned with CareOregon did not sign the floor letter, nor did the for-profit Eastern Oregon CCO managed by Moda Health.
Oddly, the Oregon Health Care Association, which represents long-term care providers -- who receive Medicaid money outside CCOs -- also signed the letter of opposition, but the organization’s president Jim Carlson did not explain why, when asked for comment. PacificSource Community Solutions, which runs two nonprofit CCOs in Central Oregon, also signed the floor letter but is not a member of the Coalition for a Healthy Oregon.
Reach Chris Gray at [email protected].