Transformation Bill Headed for First Major Test in Joint Ways and Means Committee

The legislation is expected to face a feisty discussion by Senate Republicans who insist that tort reform be included

February 9, 2012—After hours of discussions and countless meetings between closed doors, legislators appear to have finished negotiating what might be the final version of Senate Bill 1580, which, if approved, would allow the Oregon Health Authority to begin soliciting proposals for coordinated care organizations (CCOs).

That bill passed out of the budget writing Ways and Means Human Services Subcommittee unanimously late yesterday evening, after legislators scrambled to finish negotiations while lobbyists laughed, joked, and kicked back in the hallways and a hearing room.

“The urgency of passing this bill tonight is that it allows it to go to the full Ways and Means committee on Friday,” said Rep. Tim Freeman (R-Roseburg), and legislators can balance the budget in a timely fashion.

Coordinated care organizations represent the backbone of the transformational reforms being to the Oregon Health Plan's delivery system. CCOs are expected to integrate and coordinate the physical, mental and dental healthcare of about 600,000 people on the Oregon Health Plan. It's expected that the coordination will help stabilize healthcare costs by relying on primary medical homes, community health workers and avoiding hospital emergency room visits.

Senate Bill 1580 adds some detail and guidelines to the implementation proposal developed by the Oregon Health Policy Board, which describes how a CCO will work and what criteria it will be held accountable to, which some have criticized for being overly broad and flexible.

Among the changes legislators made are:

--Detailing the content of the reports the Oregon Health Authority will make to the Legislature about the progress of implementing CCOs. Reports will be made four times a year and address topics that include the implementation of CCO's throughout the state; creating an arbitration process; the financial breakdown of a CCO's spending on physical, mental and dental care, and the development of a CCO's reserves.

-- Require that a CCO's community advisory council must include consumers and other community members and meet at least every three months. This council is charged with overseeing the adoption of a community health assessment that will “define the scope of the activities, services and responsibilities that the coordinated care organization will assume,” as well as "identifying and advocating for preventive care practices to be used by [CCOs]."

-- Creating “innovator agents,” who will be employees of the Oregon Health Authority and be the single point of contact between the authority and CCOs. “The innovator agent must be available to the organization on a day-to-day basis to facilitate the exchange of information between the coordinated care organization and the authority,” according to the bill.

--Language dealing with anti-trust issues and how a CCO will share health information between the organization's various providers, the local public health department,

--Establishes a workgroup called the Patient Safety and Defensive Medicine workgroup, which will consist of legislators and at least one physician and trial lawyer. The workgroup's task will be to develop legislation for the 2013 Legislature to reduce medical errors.

--Requiring that CCOs have restricted reserves of $250,000, plus 50 percent of a CCO's yearly liabilities over $250,000.

--Inclue of a list of somewhat broad criteria for a CCO, requiring CCOs to show “demonstrated experience and ability” in managing risk and creating reserves; operating under a global budget; developing and using alternative payment methodologies; coordinating physical, mental, chemical dependency, oral healthcare and long term care services; and engaging the community in eliminating health disparities.

--Requiring that a physical and a mental healthcare provider must serve on the CCO’s governing board.

--Creates a nine-member committee appointed by the Oregon Health Authority to develop quality measures and outcomes for CCOs.

The final negotiations resulted from discussions among Sen. Alan Bates (D-Medford), Rep. Tim Freeman (R-Roseburg), Rep. Tina Kotek (D-Portland) and the Governor’s office.

Legislators wanted to give the Oregon Health Authority the ability to “be nimble and be quick” to get CCOs up and running, while putting up “guidance and sideboards” about how the organizations should work, Bates said, adding, “We did not try to pick winners and losers in this.

The new version of Senate Bill 1580 represents the bare minimum of what’s needed to secure bipartisan support, according to Kotek, who said, “The reality at this point is knowing what we need for CCOs to go forward,” adding that anyone wanting to make further changes would need to have a “solid argument.”

One of the last minute changes requires a mental health provider to serve on the CCO’s governing board. It came about following impassioned testimony by Jonathan Ames, the lobbyist for the Oregon Residential Providers Association and other groups representing behavioral health and addiction providers at a hearing earlier this week.

“Their co-occurring disorders drive up healthcare costs significantly,” Ames said. “If any CCO is going to lower costs, they are going to have to get a handle on those folks who have mental health and addictions issues.”

Once the CCOs get under way, the overall concern is that mental health concerns may not receive the same attention as physical healthcare needs, Ames told The Lund Report. “If you look at the history of funding and the priority of mental healthcare in the pecking order, mental healthcare is constantly relegated to the back of the line.”

Even Bates alluded to the difficulty of negotiating that piece of a CCO’s governance structure during last night’s hearing. “We had to go forward and do this,” he said. “It does not mean we do not value other providers. These are two special groups that need to be there.”

Senate Bill 1580 now proceeds to the full Ways and Means Committee, then onto the Senate and House floors, and could face a feisty discussion among Senate Republicans.

At a Senate Healthcare Committee hearing last week, all the Republicans voted against the bill, and Republicans have made no secret about their desire to see tort reform included in the legislation.

That issue is expected to be taken up during the 2013 session. “We just couldn’t do it this session,” Bates said during last night’s hearing.

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Just curious... In states where tort reform has been instituted, how much money has been saved? Is it quantifiable?

This is the time to include malpractice reform. Patients need it most, as the current system is arbitrary and many injured patients, malpractice or not, deserve some compensation but do not receive it. 60% of our premium goes to lawyers and administrative costs. Quality would improve. However, we shouold not simply advocate for the usual cap on pain and suffering. For sensible alternatives, read the NEJM article by Mello and Brennan, July 2, 2009. This would do a lot to get physician support behind the upcoming legislation. The impediment is the money the tort bar pours into local and national politics and not because it doesn't make sense.