The Kotek administration in Oregon has increased its offers to the organizations that oversee care for over 1 million low-income people enrolled in the Oregon Health Plan. The new rates, which represent a 10.2% average increase, are intended to satisfy the coordinated care organizations (CCOs) that have been losing significant amounts of money due to inadequate reimbursement rates. However, it is unclear if this will be enough to keep the CCOs from leaving the state’s Medicaid-funded managed care system on January 1, as some of their leaders have threatened.
The CCOs have been struggling to cover costs, with hundreds of millions of dollars in losses, and have expressed concerns that the state’s rate development model has not kept pace with the evolving healthcare system. The new rates are seen as a “meaningful first step” in addressing the challenges, but CCO leaders are still evaluating whether the increases are sufficient to ensure their continued participation in the program.
State officials have acknowledged that more needs to be done to address the issue and have proposed several changes to the program, including shifting funds from quality payments to increase provider reimbursements, taking over payment for high-cost drugs, reducing reporting requirements, and taking responsibility for unexpected behavioral health costs. The situation has also raised questions about the 3.4% cost growth target that state health officials have been trying to enforce.
The CCOs have expressed concerns about the potential impact of the state’s proposals on patient access and the ability to maintain dental care. Sean Jessup of the Eastern Oregon Coordinated Care Organization noted that the rates do not seem to take into account regional variations and challenges in providing rural care. The organization is concerned about the ability to maintain dental access, as the statewide dental rate did not receive an equivalent increase.
The situation is being closely watched, with Rep. Rob Nosse, chair of the House health care committee, describing it as the worst he has seen in a decade. The potential disruption to care could have significant consequences for patients, with one organization’s withdrawal from the program in the past sparking complaints from providers that it could lead to patient deaths. The Kotek administration’s efforts to address the issue are seen as a crucial step in ensuring the sustainability of the Medicaid program amid unprecedented fiscal and policy constraints.