A new five-year round in Oregon’s Medicaid system has just begun and already it’s taken a toll on Trillium Community Health Plan, a for-profit insurer facing competition for the first time on its home turf.
The Eugene-based Medicaid insurer is cutting an estimated 60 to 70 jobs after about 50,000 Medicaid members in Lane County switched to rival insurer PacificSource Community Solutions.
Trillium would not confirm the exact layoff numbers, but it did issue a brief statement to The Lund Report. “These changes are part of an effort to continue to meet the dynamic needs of members and providers. Affected employees have been offered severance and outplacement services, and recruiters are working with them to determine if any other job openings throughout the organization would be a good fit,” the statement said.
A Trillium employee said the company told staff the cuts would reduce the Eugene staff to 380 from 445.
The layoffs follow Trillium’s sharp loss of market share in Lane County and troubles getting into the Portland-area market. Last fall the Oregon Health Authority awarded it a Medicaid contract in the $1.5 billion-a-year tri-county market, where Health Share of Oregon has enjoyed a monopoly with 320,000 members. But the authority later put that contract on hold after Portland-area providers declined to sign up with Trillium. OHA gave Trillium until June to build a provider network. https://www.thelundreport.org/content/state-blocks-trillium%E2%80%99s-medicaid-bid-portland-area
In Lane County, Trillium was the sole insurer for the area’s roughly 90,000 Medicaid members. But effective the start of the year, the Oregon Health Authority, under its CCO 2.0 program, awarded PacificSource a five-year contract in Lane County. As of late January, through either member choice or OHA allocation, PacificSource had 50,418 Lane County members, and Trillium had 41,553, the state said.
That’s a huge revenue gain for PacificSource and a corresponding loss for Trillium. The state typically pays a Medicaid insurer about $5,000 a year per member, to cover the member’s health care costs and the insurer’s operating expenses, as well as provide the insurer a profit. So, PacificSource has gained about $250 million in annual revenue, at Trillium’s expense.
PacificSource, meanwhile, has added jobs to handle its increased workload, but it’s unclear exactly how many. PacificSource’s Medicaid business has swelled in part because the company won the exclusive Medicaid contract for Marion and Polk counties, with 100,000 members. PacificSource also holds the Medicaid contracts for the Bend and Hood River areas.
One Trillium employee told The Lund Report that Trillium had announced internally that in the next few weeks it will cut 60-70 staff positions, all in Eugene. The employee, who spoke on condition of anonymity, said Trillium attributed the cuts not only to the loss of Medicaid members, but also to the loss of some Medicare members. Medicaid insures low-income people; Medicare largely insures the elderly.
As of last fall, Trillium had 2,330 Medicare members. A sister company, Tigard-based Health Net Health Plan of Oregon, had 36,441 as of late last year. Both companies are owned by health insurance conglomerate Centene Corp. of St. Louis, Missouri. Current figures on their Medicare membership are not publicly available.
If Trillium lost some Medicare members, that, too, would be no surprise.
The Vancouver, Washington-based PeaceHealth hospital system dropped out of Trillium’s and Health Net’s provider network effective Jan. 1, which made Trillium’s and Health Net’s Medicare Advantage insurance plans less attractive to members who relied on PeaceHealth providers.
In a lawsuit filed in U.S. District Court last year, PeaceHealth alleged Trillium and Health Net had misled consumers into believing that PeaceHealth was remaining in the provider networks for 2020. A judge ordered Trillium and Health Net to post clarifying statements on their websites and send out clarifying statements to insurance brokers. The two companies complied and the lawsuit was then dismissed.
You can reach Christian Wihtol at [email protected].
