Transformation Bill Passes the House

It is expected to be signed into law within days, allowing coordinated care organizations to be created
The Lund Report

February 24, 2012—The bill allowing for the overhaul of the Oregon Health Plan’s delivery system passed the House with an overwhelmingly bipartisan 53-7 vote today, after being stalled for days because it became a part of end-of-session political negotiating and bargaining.

Governor John Kitzhaber is expected to sign Senate Bill 1580 into law within days. The bill allows the Oregon Health Authority to move forward with creating coordinated care organizations (CCOs) throughout the state by July 1.

At the heart of CCOs will be patient teams made up of doctors, nurses, behavioral health providers, community health workers, and other providers who will integrate physical, mental and dental healthcare to the 600,000 patients on the Oregon Health Plan. The hope is that by focusing on preventive care and reducing emergency room utilization, costs can be reduced.  

The House’s public galleries were filled with healthcare lobbyists to witness the two-hour debate yesterday. Sen. Alan Bates (D-Medford), one of the three legislators who negotiated the final version of Senate Bill 1580, watched as the votes were cast.

“It’s a big step,” Bates said after the vote. “I am very happy to see this happen.”

Rep. Mitch Greenlick (D-Portland), who has worked in healthcare his entire professional career, said that Senate Bill 1580’s passage is an important stop in transforming healthcare. He went onto list the major steps the Legislature has taken to reform healthcare, including the creation of the Oregon Health Plan in the 1990s, the work done in 2003 to save it from collapsing, the creation of the Oregon Health Fund Board in 2007 and the creation of the Oregon Health Authority and Oregon Health Policy Board in 2009.

“This bill is a very important bill” in that train ride, he said. “The ultimate station for this train is a place where every Oregonian has access to affordable, effective and high quality healthcare.”  

For Oregon Health Plan members, CCOs will mean that their healthcare will be delivered in a more organized and integrated manner, Bates said. “We’ll be lucky to see change at the patient level in the next six months,” he continued, adding that it’s more likely those changes will happen within a year.

CCOs will also do away with a long standing problem Bates said he sees in his own clinical practice where patients on the Oregon Health Plan get shunted from one provider to the next with the lack of communication among providers about the patients’ needs. Mental health providers will also be able to work collaboratively with a patient’s primary care physician.  

“Now we’re all in the boat together,” Bates said.

The House debate was far less contentious than what transpired in the Senate two weeks ago, when Republicans made every attempt possible to include language in the bill about medical liability reform and, otherwise, threatened to kill it.  

The bill does call for the creation of a Governor-appointed group, the Patient Safety and Defensive Medicine Work Group, which is charged with developing legislation for the 2013 session on medical liability reform.

During the House debate, Rep. Tim Freeman (R-Roseburg) spoke to detractors, making it very clear what Senate Bill 1580 does not do, including creating particular healthcare mandates, affect  private insurance or people not covered by the Oregon Health Plan, or require providers to offer services to Oregon Health Plan patients.

He spoke at length about the bill’s language around increased transparency, protecting CCOs from anti-trust language, reimbursement, the arbitration process created by the bill, governance, and what will be done between now and the 2013 legislative session to address medical liability. The details found in Senate Bill 1580, he said, “places critical sideboards on the Oregon Health Authority as to how it will move forward with the implementation of CCOs.”

In her floor speech, Rep. Tina Kotek (D-Portland) said the bill’s final version “made sure the details were really where they needed to be.” In an earlier interview with The Lund Report, she called the legislation a “compromise bill,” which was heavily negotiated.”  

Much of her speech focused on the financial savings expected from coordinating care and preventing emergency and unnecessary specialty care. As much as health transformation is about providing more effective and quality healthcare, she said, “it’s also about money, even if we didn’t have a fiscal crisis. It was the budgetary challenges that forced this conversation. This about bending the cost curve. We’ve been talking about it, but finally, we have really gotten serious about.”

She mentioned the findings of a study done by Health Management Services, a consulting firm hired by the Oregon Health Authority to investigate the savings possible with care coordination. The study found that at the very least, coordinating care can save $155 million in the next year, and by 2017, as much as $4.6 billion.

She also specifically mentioned dental care organizations, which are not required to join CCOs until 2014. “I really hope we don’t wait until 2014,” Kotek said. “We know that oral health is…an important piece of integrated care.”

After listing many of those complaints about the legislation, Rep. Jason Conger (R-Bend) said “to do nothing is simply unacceptable,” adding that “it required leadership” to get the bill to the House floor for a vote.

“I don’t mean the twisted, pathetic concept of leadership that values political positioning and partisan gain over good policy,” he said. “I mean real leadership, to do the hard work that is required to address big issues that matter to Oregonians who are not in this building, to the rest of the state besides us. There is risk involved in passing this bill. But I believe that I know I was sent here to address those kinds of problems—like jobs, and yes, healthcare…despite the risk in the bill, I will be voting yes.”

Conger’s comment about leadership may have alluded to the fact that bill became stalled on the House side following its passage in the Senate. A House vote was expected to quickly follow, but it became stalled because, sources say, Republicans held the bill to negotiate for other legislation they considered a high priority such as job creation, increasing the amount of water that could be taken from the Columbia River to irrigate agricultural land, and increasing timber harvesting in state forests.

Had Senate Bill 1580 not passed, lawmakers would have faced a $593 million shortfall—$239 million in state funding, and around $350 million in federal matching funds—in the state’s budget starting July 1,  on top of the nearly $300 million hole legislators are currently filling. Rep. Peter Buckley (D-Portland), a co-chair of the Joint Ways and Means committee, said the deficit would have been “catastrophic” to the state’s budget.

Next steps include rule-making, federal waiver applications

Once the Governor signs the bill into law, the Oregon Health Authority is expected to apply to the Centers for Medicaid & Medicare Services (CMS) for waivers that will allow CCOs to blend the funding to create global budgets, and allow community health workers and other non-traditional health providers to be paid; currently there’s no insurance billing code for those categories.    

CMS is expected to approve Oregon’s waivers, as well as provide the state with up to $2.5 billion over the next five years to help pay for the initial start up costs for CCOs. During a press conference yesterday morning, Governor Kitzhaber said the federal government considers Oregon’s reform efforts a model that can be replicated in other states, and perhaps nationally. If  these CCOs are able to reduce costs as expected, the federal government could save as much as $10 billion over the next decade.  

If there are any providers or organizations hesitant to join CCOs, Bates said, the federal dollars “will be a huge carrot for people.”

At the same time the state is applying for waivers, the Authority will be drafting and writing the administrative rules and regulations that will detail how the Authority and the Department of Consumer and Business Services will share financial information about CCOs, the criteria and expectations of CCOs and establish an arbitration process.

In April, the Oregon Health Authority will begin accepting proposals from organizations that want to form CCOs.

Exchange Bill Yet to Be Voted On

Another major healthcare bill still awaits a vote by the House and Senate—House Bill 4164, which would approve the business plan developed by Oregon’s health insurance exchange. The bill’s passage allows the exchange to move forward with preparing to offer health plans and cover individuals and small businesses by January 2014.

The bill has strong bipartisan support and was expectedly to easily pass the House two weeks ago, but Republicans voted in lock step, along with one Democrat, and referred the bill to the Joint Ways and Means Committee.

Rep. Tim Freeman (R-Roseburg) said that “specific questions” about the state’s financial commitments to the exchange had yet to be answered, and that the bill’s referral to the committee would be a “quick stop.”

But the bill still hasn’t been given a hearing to move out of a subcommittee, which is required before the full Ways and Means Committee can pass the measure and send it to the floor of the House and Senate.  

If the bill does not pass, according to the exchange’s spokesperson Lisa Morawski, at least some of the exchange’s $48 million in federal funding may be in jeopardy. And, she said, it may increase the likelihood that the federal government may not certify Oregon’s exchange as ready to provide health coverage when it applies for certification in October 2013.

“If we are not ready on time, the federal government would implement Oregon’s exchange,” Morawski said in a statement to The Lund Report. That would mean the federal government would make all major policy decisions and there would be no oversight role for the Legislature or Governor, among other things.


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So sad to see a good bill such as HB4164 get held hostage by partisan politics. Oregonians should be beating down Republican leadership's doors demanding they immediately allow the bill to have a final vote. Shameful. Every bill should be measured and passed on its own merit rather than for profit.