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Provider taxes, staffing shortages and mental health will be top priorities for lawmakers in 2025

Looming over the session are a possible contempt order over the Oregon State Hospital as well as Trump administration changes
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Drazan, Fahey, Bowman
Oregon House legislative leaders speak to the press during a Jan. 16, 2025 media availability about the upcoming legislative session. From left, House Minority Leader Christine Drazan, House Speaker Julie Fahey and House Majority Leader Ben Bowman. | JAKE THOMAS/THE LUND REPORT
January 21, 2025

In their first long session since 2023, Oregon lawmakers will tackle a variety of pressing issues in health care while navigating urgent deadlines and writing a new budget — all while bracing for possible action by a federal judge as well as potential funding and policy changes from the new Trump administration.

Over the next five months, even as most lawmakers are focused on a major transportation funding package, they’ll also have to tackle a tricky funding situation for the Oregon Health Authority.  

That means, for the first time in years, trying to revise and expand the provider taxes that fund a large chunk of the costs of the Oregon Health Plan that covers 1.4 million low-income people.

Meanwhile, as the five-year contracts issued by that health care program expire, lawmakers will tackle as many as 30 bills or more calling for reforms or changes to it, the largest outsourced program in the state.

On top of that, the Legislature is under pressure to boost funding for the state’s primary psychiatric institution, the Oregon State Hospital, in hopes of preventing or limiting the costs of a potential federal order. A federal judge is mulling whether to hold top state officials in contempt and subject the state to hefty fines due to continuing civil rights violations against people experiencing mental illness.

“I would like to send a message that public health is really important, and we absolutely need to invest more in that."

They’ll also consider a variety of other bills that would force hospitals to disclose more financial data, while trying to address continuing health care staffing shortages and persistent health care inequities.

In addition, lawmakers will try again to limit investors’ control over medical practices, stabilize school-based health center funding and address hospital worker safety among other efforts. 

Many of these bills are responses to post-pandemic trends that are still unfolding among hospitals, insurers and others. 

“There’s going to be a lot of attention this session on hospitals and a lot of attention on health insurance,” State Rep. Cyrus Javadi, a Tillamook Republican and vice-chair of the House health committee, told The Lund Report

A backdrop of discontent

He said the session will occur against the backdrop of the killing of Brian Thompson, the CEO of UnitedHealthcare, which sparked a public outpouring of anger over health care.

The challenge, Javadi added, will be to “really look for the right opportunities to improve health care.”

Rep. Rob Nosse, meanwhile, noted that Providence nurses and doctors have been on strike for over a week over pay and staffing, as well as continuing disagreement over new state nurse staffing requirements. 

The extent to which lawmakers wade into the dispute remains to be seen. But state Rep. Travis Nelson, a Portland Democrat and health committee vice-chair who is a nurse and union ally, has introduced bills that would require hospitals to disclose how much they spend on replacement workers during strikes, on opposing unions and executive compensation, as well as their cash on hand and other data

“I believe we can catch some of those folks earlier, and improvements in civil commitment are necessary."

There’s more uncertainty around how lawmakers may respond to federal changes. In its first two days, the new Trump administration has already issued orders withdrawing from the World Health Organization, dismantled policies around equity and civil rights, and eliminated rules intended to bring down health care costs.

By the first week of February, Nosse said he plans to hold hearings on multiple bills intended to reform pharmacy business managers, intermediary companies accused of driving pharmacies to close. By the second week, he said he intends to begin hearings on roughly 30 bills before his committee that would alter the responsibilities and oversight of the state’s 16 regional coordinated care organizations that the state pays to administer the Oregon Health Plan.

Medicaid funding up front

Oregon legislative leaders said they will act early in the session to secure funding for the Oregon Health Plan, the state’s version of Medicaid that currently covers 1.4 million Oregonians. 

House Bill 2010 would extend taxes on hospitals and insurers while making changes to increase the amount of money generated. The taxes are projected to provide about $2 billion to help fund the Oregon Health Plan. 

“Our providers, our hospitals, other folks are feeling some sense of urgency to get that done sooner,” Oregon House Speaker Julie Fahey, D-Eugene, said during a press availability last week. She added that she expected the bill to pass in the first half of the session. 

The Hospital Association of Oregon has expressed support for renewing it. Senate President Rob Wagner, D-Lake Oswego, said during the press availability that the tax has had bipartisan support in the past and lawmakers need to approve it in order to access federal matching funds. 

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Bonham, Wagner, Jama
JAKE THOMAS/THE LUND REPORT
Oregon Senate legislative leaders speak to the media during a Jan. 16, 2025 media availability about the upcoming session. From left, Senate Minority Leader Daniel Bonham, Oregon Senate President Rob Wagner and Senate Majority Leader Kayse Jama. 

But Senate Minority Leader Daniel Bonham, R-The Dalles, pushed back, saying, “I don’t believe in taxing health care as a blanket statement.” He criticized Democrats for their openness to using their new supermajority to pass taxes without Republican input. He also raised concerns about access to health care in rural areas. 

“A lot of times, (people) have to drive (30 to 45 minutes), an hour plus to get to the nearest provider, nearest hospital,” he said. “And our rural hospitals, right now, because of Medicaid reimbursement rates (and) because of Medicare reimbursement rates, are struggling to survive.”

He said that the obstetrics department at a hospital in his district told him they are losing $17,000 per birth. 

Lawmakers have introduced multiple bills intended to improve reimbursement for providers who serve Oregonians covered by the Oregon Health Plan. The bills would require coordinated care organizations to establish minimal reimbursement rates for hospital labor and delivery servicesdental care as well as primary care and other services. 

When asked if he supported raising rates, Bonham responded, “I think we need to have a very serious discussion.”

Lawmakers have also sponsored bills in the current session that would direct coordinated care organizations to increase reimbursements for addiction treatment and inpatient psychiatric services

Behavioral health remains a focus

Oregon lawmakers have approved more than $1 billion since 2021 in spending intended to improve the state’s underdeveloped behavioral health system. But state figures show the state still needs roughly 4,000 more beds in facilities to treat mental health and substance use disorder facilities. 

Not only that but Disability Right Oregon asked a federal judge earlier this month to hold the state in contempt for its lack of urgency to the crisis, which could force a reordering of resources. 

In response to a question from The Lund Report during a press availability Thursday, Gov. Tina Kotek said her administration has been committed to making the state hospital function better and dismissed criticisms from Disability Rights Oregon. 

“There’s going to be a lot of attention this session on hospitals and a lot of attention on health insurance."

Not surprisingly, Kotek made funding the state hospital a priority in both her budget and in her recent State of the State address.

Kotek’s budget called for increasing spending on the Oregon State Hospital to $1 billion to help it comply with federal safety requirements and court orders. 

The state hospital almost exclusively admits patients accused of crimes who need treatment in order to face prosecution. 

“It’s nearly impossible to get long term psychiatric hospital level care through civil commitment or voluntary commitment, because of the needs of the judicial system filling up Oregon state hospital beds,” she said during her address. “We have to change this … I believe we can do a better job of coordinating shelter services with access to mental health care, and by doing so, help people stabilize before they decompensate and a crime is committed.”

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Gov. Tina Kotek
JAKE THOMAS/THE LUND REPORT
Gov. Tina Kotek speaks with the press on Jan. 16, 2025.

Lawmakers sought to boost the state’ behavioral health workforce last year. One bill this session, HB 3129, would create the Higher Education Behavioral Health Workforce Expansion Fund. It also allocates $18 million over two years to retain workers while helping colleges and universities to expand behavioral health programs and offer scholarships to students.  

Kotek said that her proposed two-year budget reflects her priorities around mental health and addiction.  She said her budget includes $80 million in bonds for permanent supportive housing that will provide services to people with serious health issues or mental illness. 

Kotek said she supports a bill from the Oregon chapter of the National Alliance on Mental Illness that would make it easier for a judge to civilly commit a person deemed to be a danger to themselves or others due to mental illness. She added that the bill should also come with making sure that communities have resources for someone once they’ve been stabilized. 

“I believe we can catch some of those folks earlier, and improvements in civil commitment are necessary,” she said. 

Reforming the state’s civil commitment is expected to be highly contentious. Disability Rights Oregon, a more outspoken opponent of the bill, has argued it will be costly, ineffective and would violate the civil rights of mentally ill people. 

Work remains on health care workforce

State Sen. Deb Patterson, a Salem Democrat who chairs the Senate Health Care Committee, told The Lund Report she was still sorting through the 89 bills assigned to her committee. But she said that a bill allocating funding for the public health work force will be at the top of the agenda. 

She said the first bill she will hold a hearing for is Senate Bill 161, which would allocate $5 million in grants for training programs for public health workers. 

“I would like to send a message that public health is really important, and we absolutely need to invest more in that,” Patterson told The Lund Report. 

Patterson said her bill would help address Oregon’s behavioral health crisis by training more community health workers that she said are more systematically connected with communities and can intervene with families and individuals early on. 

state report released last week found mixed results from Oregon lawmakers’ recent efforts to increase the state’s shortage of health care workers. The report cited state data showing that health care and social assistance businesses accounted for nearly a third of all job openings in the state with more than 18,800 vacant positions. 

While pandemic-era rates of burnout among health care professionals has decreased, it remains a challenge, the report found. Patterson is also sponsoring Senate Bill 531, which would allocate $1.6 million over two years for a wellness program that supports health care workers with counseling, education and research. 

Later in the session, Patterson said she will push for Senate Bill 27, currently a placeholder bill, that would direct the Oregon Health Authority to look into what she described as “creating alternative paths and supporting apprenticeships in those ways for entry level healthcare workers.” 

Other health care work force bills include:

  • HB 2204, would broaden eligibility for tax credits for rural medical providers. 
  • Senate Bill 693, would establish a 12-member task force to look into ways to improve the state’s perinatal workforce. 

Corporate medicine and access on tap

Patterson said she will be spearheading a key piece of “unfinished business.”

A high-profile bill that would limit how much influence large corporations and investors can have over independent medical practices died in the Senate last year despite easily clearing the House. 

Patterson said she will introduce a rebooted version of the bill in the Senate in order to make sure it has enough time to overcome the stiffer opposition it faced last time. House Majority Leader Ben Bowman, the original sponsor of the bill, will cosponsor it.  

“I would like to be sure it got its full due,” Patterson said.

Javadi, the Republican state representative, said that he will again cosponsor the bill, which he said will be one of his priorities for the session. He said that he expects the bill, which has not been released yet, to have a better shot after making concessions to opponents. 

But he said that while the bill would limit corporate ownership of small medical practices, it could mean that hospitals would be unchecked in their acquisition of smaller players. 

Bowman introduced the bill last year out of concerns that growing consolidation was putting large corporations in charge of too many health care decisions. 

In recent years, Oregon has seen hospitals reduce services or threaten to do so. Other bills introduced this session are also aimed at preventing business decisions from affecting patient care. 

  • House Bill 3234 would authorize the state attorney general to investigate and bring penalties against health insurers who are engaged in anti-competitive behavior. 

  • House Bill 2939  would require a hospital to give 275 days notice before closing or reducing a service. 


You can reach Jake Thomas at [email protected] or at @jthomasreports on X.

Comments

Submitted by Debra Bartel on Fri, 01/24/2025 - 08:12 Permalink

Excluding public payer money from CAT taxes should be a top priority.  Providers in this space (Medicare and Medicaid) already accept reimbursement far under the costs of providing this care; taxing them on the small dollars they do earn for it seems like adding insult to injury.  It certainly makes it much more difficult for safety net clinics to keep their doors open.