The Oregon Health Policy Board approved a road map to change the way care is provided to Oregon Health Plan members, shifting to a system that will reward health care providers for improving outcomes, address the social factors that affect health and reduce barriers to mental health care.

Most Oregon Health Plan members receive care through regional coordinated care organizations, known as CCOs, which are paid a set fee per member each month and must provide all the care their members need out of that pool of funds. The initial round of contracts with CCOs is set to expire at the end of 2019. State officials will choose a new set of CCOs for the next round of contracts to start in 2020. The Oregon Heath Plan, the state’s Medicaid program, covers nearly a million Oregonians, including about 50,000 in Central Oregon.

“We’ve taken this opportunity to really look at what’s working with CCOs and where we need to push the system to advance health transformation in Oregon,” said Zeke Smith, chair of the policy board, the policy and oversight body for the Oregon Health Authority.

“Together, these policies have the potential significantly change how our members experience care, and how the state pays for that care.”

The approach will require CCOs make 70 percent of their payments to providers under value-based contracts. Value-based payments reward providers for health outcomes, rather than for the number of the services they provide. That allows clinics to focus on things such as care coordination and patient education that lead to better health results but haven’t been paid for under traditional health insurance contacts.

Oregon Health Authority Director Patrick Allen gave the example of Primary Health, the CCO in Grants Pass, which had a number of poor women with very poor pregnancy outcomes. The women weren’t getting adequate prenatal care and had babies with low birth weights.

The CCO contracted with a women’s clinic, providing it an upfront payment to manage the prenatal care of these women, and then an incentive payment depending on their outcomes.

“They could provide more intensive case management up front for these women and thus have better outcomes including lowering the percentage of low-birth-weight babies,” Allen said. “The really cool thing is the improvements that they made in how they managed the women’s cases in the prenatal stage, applied to all the women in the clinic, whether they were on OHP, or not.”

Agency officials believe such approaches could be duplicated throughout the state and that the requirements for value-based payments under the Oregon Health Plan could drive a similar transformation for other types of public and private health plans.

In some ways, that approach mirrors what health maintenance organizations were attempting to do decades ago. Allen said HMOs had a financial incentive to skimp on care.

The value-based approach tracks the quality of care and the health outcomes to ensure that doesn’t happen.

“We try to build incentives into the system to get good outcomes, but also build protection into the system to ensure it’s not just a cost cutting exercise,” Allen said.

The Central Oregon CCO, which is run by PacificSource Health Plans with direction from the Central Oregon Health Council, has made extensive use of such contracts and may be above the 70 percent threshold that CCOs will have to meet by 2025.

“We are probably way at the far end of the spectrum, relative to most of the CCOs,” said Ken Provencher, president and CEO of PacificSource. “We’ve gone that way, especially in Central Oregon, to a large extent.”

Provencher said the Eugene-based health plan is supportive of the transformation plan.

“We think the objectives make a lot of sense,” he said. “We actually think the way our CCO is structured with a strong emphasis on the local community, we’re well positioned to being able to execute on it.”

The transformation plans includes dozens of recommendations that will guide agency staff as they choose the next round of CCOs, and negotiate contracts with them, including the following:

• CCOs will be fully accountable for mental health and addiction services. Under the initial contract, some CCOs carved out such behavioral services to other organizations. Many patients experienced difficulty accessing that care and coordinating that care with their physical health providers.

• CCOs will be required to spend more on the social factors that affect health, such as food, housing or transportation. Oregon Health Plan members should expect their doctors to ask about those factors and connect them with services in the community to help address them.

• The Oregon Health Authority will try to rein in the high costs of pharmaceutical drugs, including using the state’s purchasing power to reduce costs and using preferred drug lists. Such lists specify which medications plans will cover without the need for a prior authorization, and are generally comprised of generics or drugs discounted through price negotiations with pharmaceutical companies.

• CCOs will be required to focus more on dental health, including efforts to increase the number of oral health providers in their networks.

• The plan will increase financial transparency for CCOs and put in extra safeguards to manage CCOs that experience financial problems.

“What we really learned in the first five years is that CCOs really work; they deliver better care and better health at a lower cost,” Allen said. “Now, we can shift to a higher gear and begin to realize benefits out of that.”

—Reporter: 541-633-2162,