Oregon Chooses Insurance Company Control Over Local Control for CCO

By Bud Pierce —

Medicaid, the federal health insurance program for Oregon’s poor, is known as the Oregon Health Plan or OHP. In the 1980s, OHP covered many services but paid physicians only pennies for each dollar of services provided. It was difficult to find providers who would accept OHP, leaving many patients with problems accessing care.

The 1990s found Oregon’s OHP in crisis. Insurance companies abandoned covering OHP because it had become unprofitable, leaving many without the care they needed. Gov. Kitzhaber came up with a solution. Utilizing community input, he created a priority list of the most needed services. He asked the federal government to “OK’ this priority list (waiver) that allowed better Medicaid payment for the smaller list of covered OHP services.  Providers would be realistically compensated for this shortened list of services, creating pathways of care for OHP patients. Gov. Kitzhaber asked local physicians to create organizations to administer this modified plan, and they did. With this mandate, Oregon Health Plan patients now had excellent access for covered services.

At the same time in the 1990s, before the Affordable Care Act (ACA), Marion and Polk counties had thousands of uninsured patients who did not qualify for OHP. In response to this, our local physicians and Salem Health created the Project Access Program. This allowed for the treatment of many uninsured patients by our physicians and our hospital. With Project Access, tens of millions of dollars of free services were provided to uninsured patients. There was no remuneration for the providers–no money, no tax deduction, nothing… Just the satisfaction of doing what was morally right by caring for the poor in their time of greatest need.

The recent expansion of the Oregon Health Plan under ACA doubled the number of people covered under OHP. Now over 95% of Oregonians have health insurance coverage under OHP which is all administered by local Coordinated Care Organizations (CCOs). Citizens were reassured by our state government that CCOs would be locally managed and run. By being local, CCOs would be responsive to what was needed and what worked in our own communities and for our neighbors.

In 2019, contracts that CCOs had with the Oregon Health Plan came up for renewal. The physicians of Marion and Polk Counties, including myself, with Salem Health created a local CCO that would continue to care for over 100,000 OHP patients. We applied for a 5-year contract to continue providing services for our Marion and Polk OHP patients as we have done for over 20 years.

Instead of awarding the Marion-Polk CCO contract to our local providers and hospital, the Oregon Health Authority awarded the contract to a multi-state health insurance company, PacificSource. That the Oregon Health Authority lauded PacificSource’s application, despite their lack of any significant track record of successfully ensuring Oregon Health Care Plan citizens in our area, is disappointing. Currently, PacificSource only provides health insurance coverage to a tiny fraction of Marion-Polk citizens.

The Oregon Health Authority was highly critical of our local CCO’s application, despite our 20-year track record of successfully caring for and insuring over 100,000 patients and providing free care to those who do not have insurance. It appears that all that mattered in awarding the contract was the application. The substance behind the application mattered little.

With ever-increasing federal and state dollars available in the Oregon Health Plan, insurance companies have taken notice that there are profits to be made. Large insurance plans are now reversing their decisions made in the 1990s to abandon the Oregon Health Plan when there was no money to be made. Nearly all of the 5-year CCO contracts awarded by the Oregon Health Authority went to large insurance plans that have now reentered the CCO market. Local physician-led organizations either were not awarded contracts or only given one-year contracts.

The current head of the Oregon Health Authority is a political appointee of Gov. Brown. It is safe to say that he is carrying out the wishes of the Governor in this matter. This is an administration that no longer believes in local control and is very comfortable in affording the richest and most powerful in our state with privilege and advantage. What happened to the “local control” our communities were promised?

PacificSource now has the CCO contracts in Marion, Polk, Lane, Jefferson, Deschutes, Crook, Hood River, and Wasco counties. Trillium (owned by Centene, a large for-profit insurer based in Missouri) has the CCO contracts in Lane, Multnomah, Clackamas, Washington, parts of Linn, and Douglas counties.

The doctors and providers in Marion and Polk counties and Salem Health will continue to do their utmost to provide top quality medical care to patients enrolled in the PacificSource CCO program. If PacificSource is not a good partner in these efforts, our neighbors will suffer. It is not clear that these corporate interests based outside our community will be concerned.

Let’s hope for the best for our patients.

Dr. Bud Pierce a physician and former candidate for Governor of Oregon in 2016. He is the founder of Oregon Crossroads, a podcast of honest discussions about the problems Oregon faces, and how they can be solved.