State, FamilyCare, Burnt Through $1 Million in Tax Money Fighting Over Rates

Tax dollars that were intended to help poor people with cancer, Hepatitis C and chronic conditions were wasted in the legal battle between the Oregon Health Authority and the state’s second-largest coordinated care organization.

The state and the Portland-area coordinated care organization FamilyCare squandered nearly a million dollars fighting each other in a legal battle over the proper compensation that FamilyCare and other CCOs should receive for providing healthcare for poor and vulnerable Oregonians.

Public records released by the Oregon Department of Justice puts their share of the tab at $373,000, while FamilyCare CEO Jeff Heatherington told The Lund Report that it spent more than $600,000, at first locking horns with the state over unfavorable rates and then fighting for its survival as the state nearly rescinded its contract and assigned its members to a different organization for medical management.

Heatherington added that aside from legal bills, FamilyCare spent another $400,000 on staff and consultants dealing with the lawsuit.

The state’s share of the money came from the Oregon Health Authority budget, while FamilyCare receives the bulk of its revenues from that agency to operate a Medicaid program in Multnomah, Clackamas and Washington counties.

In the end, FamilyCare was able to keep its contract serving 128,000 people in metropolitan Portland and grudgingly accepted the state’s new rates of compensation, which diverted money from FamilyCare to other CCOs, including its competitor, Health Share of Oregon, which received 20 percent more money per member for the expansion population, based on reported costs, not risk.

Chris can be reached at [email protected].

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