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State Plan To Implement Next Version Of Medicaid Unfinished, Unclear

Oregon health officials are weighing various options for enrollment and rates.
November 19, 2018

The Oregon Health Authority is three months out from requesting applications to manage the next overhaul of Oregon’s Medicaid program, but key logistics remain unclear.

The state has yet to determine what specific criteria the request will include, how to set the rates of pay and how the state will transition patients from the old program to the new one without disrupting their care. Officials also have not decided whether they will limit the number of coordinated care organizations to one per region or even how they will define regions.

Oregon’s Medicaid patients could see an entirely new group of insurance providers come 2020, when the state is set to start a new five-year contract with organizations that will coordinate the care for one in four Oregonians. At stake is more than $6 billion in federal and state money and Oregon’s experiment with expanding and reforming Medicaid.

State officials have worked hard to move coordinated care organizations to a global budget that would encourage saving money, while meeting requirements to set rates that are “actuarially sound” --  or reasonable for covering patients’ needs, Oregon Health Authority Director Patrick Allen said at a public forum in Salem on Monday.

Josh Balloch, a lobbyist for southern Oregon’s AllCare Health coordinated care organization, commended the state’s effort to “put a square peg into a round hole by fitting actuarial soundness into a global budget.”

“I really appreciate where they are trying to go,” Balloch told The Lund Report. “The overall direction is totally in the right way.”

Still, he said,” there are more questions than answers.”

Balancing Patients And Finances

One of the big issues the state needs to figure out is how to apportion patients among the coordinated care organizations to balance patients’ needs for consistent care while making sure each organization has enough members to stay afloat financially.

All patients would have the opportunity to choose their health care during open enrollment, then people who did not make a choice would automatically get assigned.

The health authority’s policy director, Jeremy Vandehey, discussed the pros and cons of three methods for assigning those members.  

In the first scenario, members who previously had Medicaid would get assigned to the same coordinated care organization they previously used, assuming that organization was still active. Those whose plan no longer exists would be randomly assigned to another plan in their area.

While this option would be the least disruptive for members, Vandehey warned that it could deter existing coordinated care organizations from making useful changes out of fears they’d lose their current enrollment. It would also limit new coordinated care organizations to signing up newly eligible members, making it hard for them to get enough people to balance their risk pool.

The second approach would randomly assign any member who does not select a plan during enrollment. This could land unsuspecting patients in a new network that doesn’t cover their providers, jeopardizing their continuity of care.

The third strategy would keep members with their plans if they get renewed and enroll patients from expiring plans to new ones.

Health advocates told state health officials at the meeting to prioritize continuity of care by keeping members with the same primary care providers. Such continuity is “critical” to providing the best care, said Dr. Renee Edwards, chief medical officer at Oregon Health & Science University.

She asked the state to automatically enroll members in plans that would keep them with their primary care provider. The state does not currently collect primary care information.

“Focusing on the members and this portion of continuity of care is really important to prevention, reducing costs and improving outcomes,” Edwards said.

This is especially important for pediatric care due to the social complexity of dealing with kids and families, said Dr. Katrina McPherson, a trained pediatrician and medical director for Tuality Health Alliance, which manages Medicaid plans in the Portland area.

“Whenever there is a transition in care, that is a huge risk for having a poor outcome or missing some important piece of medical information that may lead to serious illness or serious health outcomes,” McPherson said.

Pediatrician Dr. Julie Harris, senior director of population health at the Children’s Health Alliance, an advocate group for independent pediatricians, argued that the health authority should create a period of time after enrollment for members to change their plan.

“There is going to be a significant number of people who don’t choose and are auto-assigned or who choose and don’t understand the implications,” Harris said.

Many members don’t understand the consequences of their enrollment choice until they go to seek care, said Balloch, the AllCare Health lobbyist.

He emphasized the importance of notifying members that they will need to re-enroll once the new plan starts, regardless of whether they recently signed up.

“People often aren’t finding out they need to make a decision until after the process is already closed,” Balloch said.

Setting Rates

The second half of the meeting revealed that state health officials have a lot to work out before they set the rates the state will pay the next generation of coordinated care organizations.

Chelsea Guest, the health authority’s actuarial services manager, presented options for how the state might set the rates.

She and consulting actuary Zach Aters posed several options that included moving to a statewide rate-setting process, updating rates every two years or using an analytical tool called Prometheus, which identifies the most cost-efficient treatments.

Balloch said using an analytic tool to choose care based on costs presents ethical concerns. AllCare providers worry that such a system could promote treatment that is not in the best interest of the patient, Balloch said.

“We have to tread very carefully and diligently down this road,” he said.

Coordinated care officials have argued that the current rate-setting process penalizes them for spending less money. The more money they save, the lower their rates are the next year, they said.

Guest said the health authority plans to reward organizations that save money by increasing their capitation rate the next year. The state has a range of rates that it can pay coordinated care organizations each year. Those that save will receive rates on the higher end of that range, Guest said.

“If you’re being very efficient, you’re going to be rewarded,” Guest said.

The health authority is considering adding a bonus for coordinated care organizations that meet goals related to social determinants of health such as education and housing-status, a key priority for the next iteration of coordinated care. This bonus would be separate from the so-called quality incentive pool which rewards coordinated care organizations for meeting certain quality metrics.  The state wants to change the quality incentive from a bonus paid at the end of the year to an amount that’s initially withheld from rates paid during the year. The coordinated care organizations will only see the money after they meet certain quality metrics such as depression screening, maternal care and hypertension prevention.

“This gives us the opportunity to be able to pay more on top of the capitation rates for the social determinants of health pool and also grow the quality pool in the future,” Guest said.

Guest said the Oregon Health Authority is seeking public input on the proposals before finalizing the methodology.

Setting appropriate rates requires assessing the risk of each coordinated care organization’s pool, and state health officials won’t be able to understand the risk profile of organizations until they know which organizations will get awarded contracts and which members they cover.

To account for that, the health authority plans to make two adjustments to rates when they have more information in October 2019 and again in April 2020. How the state would make risk adjustments remains to be seen.

One option is for the state to compare coordinated care organization’s revenue with expenses over a six-month period. The state would then pay coordinated care organizations a certain amount if they paid more than they received, and collect money back in instances where the coordinated care organization spent less than they received.

“For those CCOs who have traditionally received a higher population, it seems like a situation where they would not be fully covered for costs,” said Teresa Learn, chief financial officer of CareOregon, a coordinated care organization that serves the Portland-metro area. “That is worrisome, especially with a policy of wanting to not disrupt members’ continuity of care.”

The state is also considering the possibility of retroactively altering contracts with coordinated care organizations to adjust the contract for risk. That option would require changing a state rule that limits the state’s ability to amend contracts with coordinated care organizations.

The health officials solicited feedback from coordinated care officials and other health advocates, many of whom said they did not have a clear enough understanding of the proposals to offer advice. Many of the ideas state health officials offered either lacked detail or were in the early stages.

“It feels really unclear to me at this point,” Learn said.

Health authority officials said that's to be expected.

"The reason there are still CCO 2.0 issues that have yet to be finalized is because we're still in the public comment period," health authority spokesman Robb Cowie said.

Balloch asked the Oregon Health Authority to extend the comment period beyond the current deadline of Nov. 28.  

“We can get a lot of stuff done but we need time to be able to do it,” Balloch said.

You can reach Jessica Floum at [email protected].