Buying time during a period of national health care turmoil, state House members in Salem have given the thumbs up to a delay of Oregon’s biggest contracting process — the program that sends $8 billion a year to care for more than 1 million low-income adults, children, and people with disabilities.
The Oregon Health Authority divvies up that money among 16 regional coordinated care organizations that serve the Medicaid-funded Oregon Health Plan, while renewing their contracts every five years.
But now, with new restrictions on care coming from federal agencies under the Trump administration — and deep cuts proposed in Congress — House Bill 2205 would allow agency officials to push back the contracting process they were set to begin this summer.
“Congressional action leaves Medicaid in an uncertain place,” said Richard Blackwell, a lobbyist for PacificSource, which oversees four of the 16 care organizations, in testimony. “With the rapidly changing federal environment, whatever the agency plans for today might be moot a year from now.”
State officials two years ago had already postponed the existing contracts for the coordinated care organizations, or CCOs, by two years. At the time officials opposed extending them any further, noting that the documents set expectations and accountability standards.
This year, however, the health authority endorsed the new delay effort — and said they'll extend the contracts by two years.
But not without reservations.
“A further extension would mean this contract remains in effect for nearly twice as long as originally intended,” Director Sejal Hathi said in testimony. “This also means that nearly a decade will have passed since the Oregon Health Authority (OHA) last conducted a CCO procurement – a process that enables us to clarify CCO expectations, strengthen accountability, and ensure alignment with current health system goals.”
The bill grants health officials the authority to extend the contracts for an undefined amount of time. But initially, the bill proposed changing the contract term from five to ten years.
Fueling some of the support for that idea was that unexpected glitches in some new health authority programs, launched two years ago, still haven't been worked out.
Not only that, but there’s a long-standing concern that state officials want to use the contracting process to eliminate smaller care organizations to make the program easier to manage and standardize.
“Arguments against 10-year contracts are seldom made on the basis of improved member outcomes: instead, it’s all about business and power, or “economies of scale,” which is consolidation by another name,” testified Seamus McCarthy, President and CEO of Yamhill Community Care, one of the smaller care organizations.
