OHA CCO rates found to be sound and unbiased; FamilyCare disagrees

Two independent firms of Medicaid experts report that the 2018 Coordinated Care Organization rates set by the Oregon Health Authority (OHA) are “sound, unbiased, and generally consistent with state and federal rules.”

OHA originally released the rates in November, but faced swift backlash from Portland-area CCO, FamilyCare, which said its 2018 rate increase wasn’t large enough and would likely force it out of business by August. FamilyCare has filed lawsuits against the OHA over its rate-setting process over the past few years calling it both “inequitable” and “actuarily unsound.”

After releasing the 2018 rates, along with its actuarial certification, OHA agreed to take extra steps to ensure the fairness of their rate setting and agreed to two additional independent reviews.

The recently released reviews do not recommend changes to the 2018 rates, but do ask for additional documentation to be provided to CMS. They suggest providing supplementary information on CCO loss ratios, administrative costs, profit margins, and a review of a potential southwest CCO outlier. OHA plans to follow these recommendations.

“We want OHP members, taxpayers and legislators to know if the CCO rate-setting process is sound or flawed,” said OHA Director Allen in a press release. “These objective, third-party experts have given us the confidence to move forward and suggestions to improve the process.”

In response, FamilyCare sent a press release criticizing the rate review process as insufficient and biased. They reference a November 29 letter they sent to Laura Robison, OHA’s CFO, voicing their concerns that these reviews were inadequate.

“FamilyCare warned that the limited regulatory and actuarial reviews ignored key issues, were over reliant on assertions from the state’s third party actuary (Optumas), and would fail to uncover potential biases and flaws in the 2018 rates. The findings in the report released today by OHA validate those concerns.

While OHA stated this would be an independent review, FamilyCare questioned the reviewers’ past ties to Oregon’s rate setting process. Furthermore, OHA denied FamilyCare’s request to allow CCOs to communicate their concerns directly to the reviewers. Instead, only OHA and Optumas provided ongoing input during the reviews, creating an inherent bias in the process.”

OHA says they do not plan to change the previously released 2018 rates and will discuss the results of the two independent reviews with CCOs later this week.

This article has been updated to include FamilyCare’s response.