Oregon officials have started the process of upgrading the organizations that provide care to Oregon Health Plan members and moving toward the next phase of the state’s health care transformation. Central Oregon health officials are closely watching the potential changes to ensure the region can continue to build on its success in cutting costs, improving quality and designing a healthier community.

In 2012, the Oregon Health Authority contracted with 16 coordinated care organizations, commonly referred to as CCOs. The original five-year contracts with the regional organizations were extended for a year and are set to expire at the end of 2019.

State officials are now trying to determine how to approach the second round of contracts for 2020 and beyond.

“We have a good idea of what works in the first iteration of CCOs and what needs more work,” said Mary Sawyers, a spokeswoman for the state health agency.

An evaluation of the coordinated care organizations by researchers from Oregon Health & Science University in January found that the structure helped moderate cost growth even as it improved quality, particularly where the organizations could earn incentive payments for meeting certain benchmarks.

Each coordinated care organization receives a set amount for each Oregon Health Plan member enrolled. It must decide how to allocate the state dollars to pay for members’ physical, oral and mental health needs. The organizations can also receive incentive payments for meeting certain metrics on quality, such as how many people are screened for colon cancer or how many have their diabetes under control.

CCOs also have the ability to invest dollars in their communities in ways that affect the health of their members, but don’t represent traditional health services.

Oregon pledged to keep spending growth for the Oregon Health Plan, which provides care to low-income people, to 3.4 percent per year, in a deal with the federal government that provided $1.9 billion to help with its health care transformation. While coordinated care organizations have met that target, saving an estimated $2.2 billion over the first five years, they did so primarily in a cycle of low growth in health care nationwide. The state expects costs to grow faster next year and last week bumped up CCO payment rates by 5.3 percent statewide for 2018.

Some regions have done better than others, and state officials have expressed an interest in creating greater transparency and accountability statewide.

Lawmakers in Salem have been trying to increase regulations of coordinated care organizations, and to that end approved House Bill 4018 in February. The bill requires CCOs to open board meetings to the public, spend a portion of their reserve funds in their own regions, and provide three months’ notice before ending their contracts. Those provisions will be included in the next round of contracting.

Central Oregon’s CCO has been held out as a model for other regions of the state. While some regions are dominated by a single insurance company or a large hospital system, Central Oregon’s approach relies on an insurance company, PacificSource Health Plans, to run the business aspects with direction and leadership from the Central Oregon Health Council, composed of representatives from the major health providers in the region as well as consumers.

“When we set up the framework for the CCOs a handful of years ago, the state had wanted to move more towards the model that we have in terms of governance, in terms of transparency,” said Tammy Baney, a Deschutes County commissioner who chairs the council. “But I think the reality was there was a lot of concern about sharing of information, about control over funds, and access and delivery of services.”

Baney says state officials have indicated a desire to move further in that direction in the next round of contracts, with greater transparency, shared governance and increased accountability.

“I think we’re in a good place for meeting what the state is wanting to do and I think we are a great model to be able to show how it can look,” Baney said.

Gov. Kate Brown has identified four priority areas for the next round of contracts: paying more for quality rather than quantity, improving behavioral health services, focusing more on non-medical factors that affect health and working to keep costs under control.

Discussions have been underway for some time in various state committees and workgroups, and the state has already held three public listening sessions to gather feedback. The Oregon Heath Authority has surveyed health care providers and other stakeholders and is planning a survey of Oregon Health Plan members as well. More listening sessions are planned in June, including at least one in Central Oregon.

The agency will develop recommendations for the next round of contracting and will present those to the Oregon Health Policy Board in September or October. The board will then come up with a final recommendation, which will be sent to the governor.

The board must decide how much to regulate how coordinated care organizations operate and how much freedom to give them in meeting their overall goals.

“I think it’s a balance,” Sawyer said. “But that’s one of the questions: How do you give CCOs flexibility while holding them accountable?”

The state could opt to be more prescriptive in order to raise the floor for poorly performing CCOs, or provide more flexibility that would allow higher performing CCOs to innovate.

“What I’ve heard from this region is a desire to know what the state needs to see from us, but the flexibility to determine the path to get there,” said Lindsey Hopper, vice president of Medicaid for PacificSource Health Plans.

Hopper also expects there will be continued pressure in the next contracts to reduce costs.

“The point of CCOs is to transform the system and deliver excellent care and push the envelope,” she said. “And that doesn’t happen if there aren’t new goals and new expectations.”

— Reporter: 541-633-2162, mhawryluk@bendbulletin.com