When Gov. Kitzhaber and the Oregon Legislature created coordinated care organizations to deliver services for the state’s Medicaid program, the Oregon Health Plan, it was seen as an all-in approach, where competing interests would get a seat at the table to devise the best way to locally provide healthcare for the state’s most vulnerable residents.
Anti-trust laws were waived to make this possible, even as most of the CCO governing boards have chosen to meet behind closed doors.
But despite laws against CCOs excluding any type of provider from a cut of the Medicaid pie, representatives of at least one class of providers — ambulatory surgery centers — fear they may be getting cut out of the equation, now that the state has turned over global payments to the local organizations.
“CCOs around the state have not invited ambulatory surgery centers to the table,” said Rob Schwartz, the director of the Oregon Ambulatory Surgery Center Association. Schwartz said ASCs don’t serve alongside hospitals and other doctor groups on any of the CCO governing boards.
He sounded flustered as he lamented his organization’s difficulty trying to work with CCOs: “Surgery centers have called [CCOs] and not received a meaningful response.”
Schwartz said his members are getting the blow-off despite lower prices than hospitals, a less cumbersome experience for patients and lower infection rates of diseases acquired at medical facilities.
On the ground at East Portland Surgery Center, administrator Jim Sergeant repeated Schwartz’s concerns:
“We’ve tried, but we’ve not gotten a lot of attention from them. They seem mainly to concentrate on hospitals,” said Sergeant, noting the makeup of many of the CCO boards are stacked with hospital interests, including Health Share, one of two CCOs in the Portland metro area. “They might not want hospital services going out the door.”
Coordinated care organizations are set up to work within a capped, per member per month basis — and don’t get paid for the number of services they provide. At first glance, it would seem that CCOs would have an incentive to make greater use of the cheaper services at ambulatory surgery centers — particularly for outpatient surgery.
After this year, CCOs are limited to a 3.4 percent inflation rate a year — but are also guaranteed a 3.4 percent increase in payments every year. If a CCO’s costs go down or go up less than that, it doesn’t matter — they get to pocket that extra Medicaid money.
All of the CCOs that The Lund Report contacted flatly denied that they avoid sending Oregon Health Plan patients to ASCs.
“We have quite a bit of usage of ambulatory surgery centers. It sounds like horse puckey to me,” said Jeff Heatherington, the CEO of FamilyCare, the Portland area’s other CCO. “They’re far cheaper than going to hospitals. I think they’re great.”
Health Share spokeswoman Beth Sorensen responded in an email: “We would welcome a conversation with anyone who serves Oregon Health Plan members and is interested in partnering with us in advancing the goals of the Triple Aim.”
When pressed for further detail about Health Share’s monthly use of ASCs, Sorensen wrote: “Unfortunately, I’ve determined that the data you requested is not readily available. I’ve learned that there are so many possible variables that that it would take some time, and lot more specifications, to do any calculation.”
Lawmaker Acknowledges Problem
Rep. Jim Weidner, R-McMinnville, told The Lund Report that he’s heard about the difficulties ASCs are having with at least some CCOs. “Some of the CCOs are driving [patients] into hospitals,” Weidner said. “I think it’s a lot about who set up the CCOs and who got in there first.”
The FamilyCare CCO board is made of doctor and dental groups, but it doesn’t have any hospital interests represented. Health Share of Oregon, meanwhile, has six hospitals on its board of directors— OHSU, Kaiser, Providence, Adventist and Tuality as well as Legacy Health, whose CEO, Dr. George J. Brown, chairs its board.
Brian Terrett, the Legacy spokesman, denied that Legacy or any other Portland hospital systems had any undue influence on the Health Share board or tried to discourage Oregon Health Plan members from leaving the hospitals for ambulatory surgery centers.
“I’m not aware of anything about ambulatory surgical centers not being a part of CCOs,” Terrett said, adding that while hospitals comprise one-third of Health Share’s governing board, the remaining members represent other health interests.
Terrett said he recognized the advantages of ambulatory centers — Legacy will soon open its own in Gresham to attract such business. Adventist Health system is also moving into this market, opening the Gresham Surgery Center on Friday.
Hospitals nationwide have been buying up or launching their own outpatient facilities, including ambulatory surgery centers. The hospitals are taking advantage of a perverse incentive in Medicare that pays them hospital rates for their ambulatory surgery center services, despite much lower costs, a policy that costs the Medicare program $600 million a year.
In June, the Medicare Payment Advisory Commission recommended changing this policy to pay hospital-owned centers the same as stand-alone ambulatory surgery centers.
Eugene CCO Makes Use of ASCs
In Eugene, Trillium Community Health Plan spokeswoman Debi Farr said she hadn’t heard of any problems with ASCs. “We use ambulatory surgery centers now,” Farr said. “We’re looking to utilize those services more.”
Farr’s comments were echoed by Greg Miller, the lobbyist for the surgery center organization. He said Slocum Center for Orthopedics & Sports Medicine had secured a contract with Trillium.
Miller was much more reluctant than Schwartz or Sergeant to come to the conclusion that ASCs were being left out of many CCOs.
“CCOs are young. I don’t want to jump the gun about how they’re utilizing different providers just yet,” said Miller, adding that he’s gathering data that should reveal definitively whether CCOs are relying on ASCs, with specific information about each CCO. He intends to make this data available to the February 2014 session of the Oregon Legislature.
Miller works for Pac/West Communications, which also represents the Coalition for a Healthy Oregon, a confederacy of eight CCOs, including FamilyCare, Trillium and Willamette Valley Community Health, the Salem CCO.
Schwartz remained more pessimistic and compared the CCO transformation to the rollout of the Affordable Care Act, saying early troubles have cast doubts about the federal program’s ability to deliver on its promises.
“If you make assurances and promises, you need to keep them or people get skeptical,” Schwartz said. “We want to see CCOs be successful in Oregon. We’re willing to meet with CCOs in every part of the state. But we can’t make them meet with us.”
