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March 2012 St@teside

Oregon passes legislation to further progress on their Coordinated Care Organizations and the Oregon Health Insurance Exchange

On March 2, Oregon Governor John Kitzhaber signed SB 1580, which will allow continued progress toward the implementation of Coordinated Care Organizations (CCOs) in the Oregon Medicaid program. In 2011, the Oregon legislature charged the Oregon Health Authority (OHA) with developing an implementation proposal that would describe the characteristics of a CCO, operationalize the global budgets concept, and set outcome standards. The OHA brought back recommendations to the 2012 legislature based on an intensive public decision-making process. CCOs are local health entities that will be accountable to provide physical and mental health care (and eventually dental care) under a fixed budget. They are governed by a team of health care providers, community members and other stakeholders who will focus on improving care delivery and increasing the local investment in wellness and prevention. Oregon estimates that total savings will be more than $1 billion in the first 3 years of CCO implementation and $3.1 billion over the next five years. Oregon has already submitted their request to the Centers for Medicare & Medicaid Services (CMS) to incorporate the needed changes into their Medicaid program. (Read more here.)

Improving care coordination for those dually eligible for Medicare and Medicaid will be a key area of emphasis for the CCOs. Oregon’s proposal to CMS to implement a demonstration project to care for the dual eligible through CCOs is now publicly available and open for comment.

Governor Kitzhaber also signed House Bill 4164 on March 8, representing a final step to operationalize the Oregon Health Insurance Exchange. Per the original legislation (SB 99) passed in 2011 that established the Exchange, the entity was required to have a business plan authorized by the legislature. HB 4164 passed with strong bi-partisan support in both the House and Senate.

The business plan outlines how the exchange will operate and the value it will provide to Oregonians. The plan also provides details on enrollment and funding, including the imposition of an administrative fee on participating insurers. Any excess money collected may be invested and used either to offset future net losses or to reduce the administrative costs of the public corporation. Money that exceeds the administrative and operational expenses associated with running the exchange for a six-month period is returned to the carriers. In addition to approving the business plan, the law makes several technical fixes to the original legislation (SB 99).

In addition to passing Exchange legislation, Oregon has started work on selecting an essential health benefit (EHB) plan. Following an EHB discussion at a March 8 Exchange Board meeting, the Governor issued a press release calling for nominations for a public workgroup that will participate in a process to help define the state’s EHB.