Feds OK Oregon’s Medicaid plan, but no money attached

Published 2:19 pm Thursday, February 2, 2017

Oregon officials cheered the federal government’s green light to continue the state’s Medicaid reform efforts over the next five years, even though the approval does not include any of the $1.25 billion the state had requested during that time.

“I think particularly in these times of uncertainty, the waiver provides continuity, security and coverage for the Oregonians that are on the Oregon Health Plan, which is Oregon’s largest health plan,” Gov. Kate Brown said in a conference call with reporters Friday, referring to Oregon’s Medicaid program, which covers more than 1 million people.

Brown’s office and the Oregon Health Authority have been working against the clock to secure the OK ahead of President-elect Donald Trump’s inauguration, which will throw Medicaid funding into a state of uncertainty. The Centers for Medicare and Medicaid Services will allow the state to continue operating its health care program for low-income individuals in an innovative format, but won’t provide any extra funding to do so.

CMS will have provided Oregon a total of $1.9 billion between July 2012 and June 2017 in the form of a waiver granted by the federal government in exchange for operating its Medicaid program, the Oregon Health Plan, in an innovative format that limits cost growth to 3.4 percent per member per year. During that time, the state established 16 coordinated care organizations, regional groups that administer Medicaid and are paid in part based on their scores on quality and patient outcome measures.

That money is in addition to the roughly $14.6 billion the state is budgeted to receive from CMS to provide medical services for its Medicaid enrollees during the 2015-17 biennium. The federal government currently pays for 95 percent of health care costs for the roughly 400,000 Medicaid members that came on during the Affordable Care Act’s expansion of the program to a broader swath of low-income individuals at the beginning of 2014. It also covers roughly 60 percent of the costs of people who were on the program before 2014.

Brown also did not account for the waiver money in her 2017-19 budget, in which the Oregon Health Authority was already looking to make up for a more than $1 billion shortfall.

In its waiver request to CMS, the state had asked for $250 million per year for the next five years to continue its Medicaid reform efforts. Jeremy Vandehey, Brown’s health care policy adviser, told reporters that CMS was clear with Oregon officials that the $1.9 billion attached to the previous waiver was a one-time investment.

“That was really one-time startup funds to get CCOs off the ground, and it was pretty explicit in the last waiver that those dollars are not going to be renewed or extended,” he said. “So this does not include an additional investment on top of the additional federal dollars that we’re already receiving. But what the waiver does do is continue the model that Oregon has built out and provides continuity and stability that we’ll be able to continue that model for another five years.”

Lindsey Hopper, vice president of Medicaid programs for Central Oregon’s CCO, PacificSource Community Solutions, said the waiver approval was “absolutely” necessary because it injects stability.

“It would have been nice, of course, to have those dollars, but a fast-tracked waiver and the pace at which this one was approved, that wasn’t on the table as far as I know from the governor’s office,” she said.

The new waiver clarifies how CCOs can provide their members nontraditional services that indirectly improve their health. In Central Oregon, that includes things such as fitness passes, widening a doorway to allow for a wheelchair or help with energy bills during the winter, Hopper said.

Officials with the incoming Trump administration and members of Congress have discussed turning Medicaid into a block grant system, in which the federal government would dole out funding to states in lump sums. It’s unclear how much money Oregon would receive under such a system. It’s also unclear how it would affect Oregon’s waiver.

Vandehey said he couldn’t speculate exactly what would happen to Oregon’s waiver if Medicaid is turned into a block grant system.

“If Congress makes changes to the Medicaid program, we still have to comply with those changes,” he said.

A repeal of the Affordable Care Act’s Medicaid expansion could cause those roughly 400,000 Oregonians who gained coverage in 2014 to lose coverage.

Brown’s office says the 2012-17 waiver will have saved the federal and state governments $1.4 billion in Medicaid costs. Oregon’s health reforms are projected to save a total of $10.5 billion between 2012 and 2022 by holding down cost growth to not more than 3.4 percent per member per year, according to Brown’s office.

The new waiver is effective Jan. 12 to June 30, 2022.

“As the governor, I see good health as being fundamental to the wellbeing and self sufficiency of every Oregonian,” Brown said, “and today’s approval builds on the work we have done for nearly two decades to improve the Oregon Health Plan.”

—Reporter: 541-383-0304,

tbannow@bendbulletin.com