In the red corner you have Oregon Health Authority (OHA), which is supposed to be the state run health agency that serves as the medicaid liaison. Fighting out of the blue corner is FamilyCare Inc., one of the many “community care organizations”, which is one of the many layers of bureaucracy involved in the OHA.
Seems as though the OHA overpaid FamilyCare when they doled out the reimbursements for medicaid, to the tune of $55 Million, and now they want that money back. If FamilyCare does not comply, OHA says they will remove the company from their approved list of medicaid health providers. FamilyCare is saying OHA is fudging the numbers.
The nonprofit targeted by a state ultimatum, FamilyCare, says health officials are using misleading calculations and refusing to engage in good-faith negotiations. The Oregon Health Authority is “acting like the neighborhood bully,” says FamilyCare CEO Jeff Heatherington.
Welcome to what may be the most complicated game of chicken happening publicly in Oregon politics today. It’s over money, and it may affect access to health care for the poor in Multnomah, Clackamas and Washington counties. The standoff comes at a crucial time for the state’s oft-touted Medicaid reforms, and suggests that Gov. Kate Brown may strike a different tone on health care than her compromise-oriented predecessor, John Kitzhaber.
Last week, Saxton said FamilyCare is in breach of contract for failing to fork over money that she says the state previously overpaid the company, when it set 2015 reimbursement rates too high.
If the company doesn’t repay what the state says it owes, FamilyCare won’t be allowed to be part of the Oregon Health Plan, according to the state. Saxton said the state is willing to concede a little more than a quarter of its original demand for repayment of $55 million.
But FamilyCare CEO Heatherington claims the state is punishing his company for criticizing the state’s rate-setting process, the same one that is at issue today. “OHA has been punitive in its treatment of FamilyCare, owing to FamilyCare’s whistleblowing,” according to the nonprofit’s press release.
The state was forced to recalculate its rates last year after a federal review ripped them to shreds, saying Oregon was employing “high-risk practices” and flawed projections.
The federal critique came even as, embarrassingly, Oregon’s Medicaid insurers were reporting record-setting profits amassed under reforms that former Gov. Kitzhaber had touted as reining in spending.
Heatherington says FamilyCare’s profits looked larger than other Medicaid provider groups because of a relatively straightforward corporate structure.
He says the money is being used to beef up its mandatory reserves to meet new state rules.
The state’s most recent offer to FamilyCare essentially discounted its repayment demand by about $12 million, according to Heatherington. He says the most disturbing thing is that Saxton is demanding FamilyCare sign away its right to sue over any future rate disputes, causing him to fear the worst.
“OHA’s actions demonstrate an abuse of power. In choosing to go public with this threat of termination, OHA has intentionally disrupted and undermined FamilyCare’s business relationships, causing concerns among providers, members and employees,” FamilyCare said in a press release.
Leave it to the state to make a $55 Million OOPSIE!
In a press release, Family care stated:
FamilyCare is encouraged by OHA’s acknowledgement that the 2015 and 2016 reimbursement rates for FamilyCare were calculated using a flawed methodology, and that OHA has agreed to revise the 2015 rates to correct this flaw. However, the new proposal does not include a revision to the 2016 rates. OHA has previously indicated the rate methodology must be consistent for both years.
FamilyCare serves over 130,000 Oregonians, most of whom are low income, and could be forced to find a new “community care organization” if the two companies/agencies/bureaus can’t come to terms.
It’s another classic example of government bureaucracies being too concerned over bureaucratting and not concerned about the very basis for which they exist.