Trillium Set To Lose Contract With PeaceHealth

Trillium building.jpg

The competitive scramble by health insurance companies for a bigger slice of Oregon’s five-year $5 billion Medicaid spending has turned ugly in a fight in Lane County.

Portland-based for-profit insurer Moda Health Plan appears to have scored a coup in its previously disclosed effort to expand into the Medicaid business of Lane County, a market long held exclusively by for-profit Trillium Health Plans based in Eugene.

Lane County’s dominant hospital chain and health care provider, PeaceHealth, has decided to contract with Moda in 2020 for Medicaid patients under the Oregon Health Plan, Trillium said in a statement to The Lund Report. PeaceHealth told Trillium it will drop its Oregon Health Plan contract with Trillium at the end of 2019, the Eugene insurer said.

Trillium said it was “surprised and disappointed” and was trying to persuade PeaceHealth to reverse its decision.

Contracts between health care providers -- such as hospitals and clinics -- and health insurance companies serving Oregon’s roughly 1 million Medicaid patients are key agreements. Under the contracts, health care providers typically give special low-cost bulk rates to their preferred insurers. Insurers who lack those contracts typically must pay higher “fee-for-service” rates for their patients to get health-care from those hospitals and clinics.

In essence, PeaceHealth for years has provided a special rate structure to Trillium for Trillium’s Oregon Health Plan patients. Now PeaceHealth has said it is switching the deal over to Moda, according to Trillium.

The announcement comes at a time of a possible shakeup in parts of the Medicaid landscape in Oregon, which is carved into regions served by coordinated care organizations.

Later this year, the Oregon Health Authority is slated to award Oregon Health Plan contracts for 2020 through 2024 to coordinated care applicants. This week the health authority announced it received 19 applications from 15 applicants. Moda, which currently serves as the coordinated care organization for 47,000 patients in much of Eastern Oregon, applied to expand into Lane County and other parts of the state.

Trillium, meanwhile, has said it wants to keep the Lane County Medicaid contract and expand into the Portland area.

It’s unclear what the impact on costs and services would be if the state were to reject Moda’s Lane County bid and only keep Trillium as the area’s sole coordinated care organization or if both Trillium and Moda’s applications are approved. Springfield-based PacificSource Community Solutions also wants to serve Lane County.

With a PeaceHealth contract, Moda would appear to have an edge on pricing. The hospital group has four Lane County hospitals and a chain of clinics.

Under the Oregon Health Plan, the state pays each coordinated care organization a set amount of money per month per patient to cover all that patient’s health needs.

PeaceHealth, a 10-hospital nonprofit chain based in Vancouver, did not respond to requests for comment. Jonathan Nicholas, the spokesman for Moda, declined to comment, citing the ongoing selection process by the Oregon Health Authority. 

It’s unclear if the Oregon Health Authority is aware of the burgeoning dispute or has a viewpoint on it. Authority officials did not respond to requests for comment.

Generally, the health agency has welcomed the high level of interest from insurers in serving Oregon Health Plan members, saying that shows the system is viable.

Here’s the comment Trillium issued to The Lund Report on Wednesday:

“Last week, Trillium was surprised and disappointed to learn that PeaceHealth had decided to cancel its contract with us at the end of 2019, and begin contracting with Moda Health in 2020. Trillium is in the midst of a Request for Application process and submitted our application to the Oregon Health Authority earlier this week. The OHA alone is tasked with selecting the Coordinated Care Organization that it determines best meets Lane County Oregon Health Plan member needs, based on clearly communicated RFA submission criteria. OHA’s decision is not expected until July, and we are confident that Trillium’s application will be received positively.

“PeaceHealth’s decision will not affect our CCO members at this time. The 2019 contract for services with PeaceHealth remains in effect, and our members will continue to have access to the same high-quality healthcare services that they have always received as a member of Trillium Community Health Plan.

“We continue to pursue all avenues for ongoing effective and efficient communication with PeaceHealth. We are currently working to reach an agreement to retract the termination notice and keep them in our network.”

Trillium serves about 85,000 Oregon Health Plan members in Lane County.

Many of the current 15 CCOs in Oregon want to expand their Oregon Health Plan business starting in 2020. More want to serve the Portland, Salem and Eugene-Springfield areas. So far in Oregon under the CCO system, the state typically has designated only a single CCO per geographic region. It’s up to the Oregon Health Authority to determine whether it will designate more CCOs to serve single regions, essentially divvying up a single region’s pool of Oregon Health Plan patients among multiple insurers.

Moda currently runs the Eastern Oregon CCO, which covers 12 Eastern Oregon counties. Moda has alerted the state it hopes to expand into seven more counties: the tri-county Portland metro area, plus Lane, Clatsop, Columbia and Tillamook counties.

Trillium wants to continue to hold onto Lane and parts of Douglas and Linn counties while expanding into Clackamas, Multnomah and Washington counties.

Meanwhile, Springfield-based PacificSource Community Solutions wants to keep the five counties where it currently serves as CCO in Central Oregon and the Columbia River Gorge, and expand into the Portland metro area and six other counties besides Lane County.

You can reach Christian Wihtol at [email protected].


News source: 


Over the years several hospitals have sought to exclude insurance companies  from the Medicaid and commercial market by refusing to contract with them. It smacks of anti-trust and should be considered as such. Oregon law provides for mediation if this occurs in the Medicaid market, Trillium should take advantage of it.

This article is for premium subscribers. If you are one, please sign in below.
You can see two more premium stories for free. To subscribe, click here. We depend on premium subscriptions to survive, and they are tax deductible.