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Measure to reform 16 CCOs advances.

Byline: Saul Hubbard The Register-Guard

SALEM - The House Health Care Committee on Friday narrowly approved a bill that would make a series of aggressive reforms to Oregon's 16 coordinated care organizations, which provide government-funded health care to low-income residents.

After weeks of behind-the-scenes negotiations and lobbying, an amended version of House Bill 2122 advanced on a party-line, 5-4 vote, with majority Democrats in support. The bill is expected to be on the House floor as early as next week.

Under the new HB 2122, the publicly funded CCOs would have to spend down their cash reserves on "community benefit" programs in the geographic areas they serve. They would become subject to Oregon's public meetings and records law.

The bill also mandates that any new CCOs would have to be nonprofit organizations as well. But in a concession from the original version, it would allow existing for-profit CCOs to stay that way.

HB 2122 would bring "transparency and public accountability" to Oregon's CCOs, said Rep. Mitch Greenlick, a Portland Democrat and key champion of the bill.

The proposed reforms gained momentum this session because of the sale of Lane County's for-profit CCO, Trillium Community Health Plan, to Missouri-based for-profit Centene Corp. in 2015.

That sale, and a dividend paid from Trillium's reserves, generated a windfall of $131 million for the share holders of Trillium's parent company, Agate Resources, including multi million dollar individual payouts for a handful of big shareholders.

Trillium's and the other CCOs' value comes from the public Medicaid dollars that they receive to pay for health care to low-income residents on the Oregon Health Plan. That value grew greatly with the Affordable Care Act's expansion of the number of people eligible for Medicaid coverage and the number of patients they serve.

With the support of House Republicans, the CCOs pushed a more moderate version of HB 2122 that would have required them to reinvest only "a reasonable" but undefined percentage of their profit margins into community programs, but still allowed them to accumulate sizeable cash reserves.

Their version would have required more financial disclosures from CCOs, but would not have made them subject to public meetings and records law.

The CCOs are serious players in Salem, contributing tens of thousands of dollars to Democratic and Republican lawmakers during the last campaign season and in early 2017.

Greenlick said he ultimately expects all 16 CCOs to oppose the amended bill.

"Some of them hate everything" in the bill, he said. "Some of them hate the public meetings piece. Some of them hate the reserves provision."

Courtney Johnson, a lobbyist representing a coalition of CCOs including Trillium, said her group opposes the amended bill.

"It is really unfortunate that there was no public discussion on the bill the committee voted on today," she said in a prepared statement. "And it's disappointing that (Greenlick) was unwilling to entertain the proposal supported by all 16 CCOs, which could have actually been workable."

The proposed rules for cash reserves are particularly controversial, since the CCOs now have accumulated roughly $925 million combined in reserves.

Under HB 2122, the CCOs would be required to spend down a big chunk of that money right away on health and social programs as dictated by their local "community health improvement plans."

In Lane County, for example, that spending could help fund any programs aimed at reducing obesity and smoking, on mental health and drug addiction treatment, and on early education and family intervention programs.

But CCO representatives argue that mandated spending of their reserves on certain programs hurts their ability to use them for other purposes, such as funding new heath initiatives or technology, or building new health care facilities.

And allowing CCOs to keep only a relatively low level of reserves would increase the risk that they could become financially insolvent, CCO backers say, if their revenues dry up. That provision also could violate the federal rules under which Oregon operates its Medicaid program, they claim.

But Greenlick was dismissive of the CCOs' arguments. He said he expects the bill to be approved by the full House next week. It then would head to the more moderate Senate, where Greenlick said he believes the bill "definitely has a chance."

"Then we'll see who wins," he said. "The people? Or special interests?"

Follow Saul on Twitter @SaulAHubbard. Email
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Title Annotation:Oregon Legislature; The bill mandates greater transparency and dedicates reserves for health programs
Publication:The Register-Guard (Eugene, OR)
Date:Apr 15, 2017
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