Insurers and providers could have “accountability mechanism” for rising costs in Oregon bill

House Bill 2081 recently passed out of Oregon’s House with bi-partisan support. It intends to keep down costs in all silos of the health care system by setting insurer and provider incentives to maintain a consistent health care cost growth rate that lower overall costs for the patient.   

 

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This bill builds off of previous legislation in SB 889, which established the Health Care Cost Growth Benchmark designed to control health care expenditures’ rapid growth in the state. Since its passage in 2019, the Implementation Committee created recommended benchmarks and a final report on the program logistics. The program launched in February 2021. 

House Bill 2081 will create an “accountability mechanism” for providers and insurers whose cost remains high, according to Jeremy Vandehey, the director of the health policy and analytics division at the Oregon Health Authority (OHA). The concept of transparency will lead the effort to keep insurers and providers accountable to stay within the cost-growth target. If that doesn’t work, the next step will be implementing improvement plans mandated by the OHA. After that, insurers and providers could receive a financial penalty. Vandehey said:

“With the passage of HB 2081, we can get to work in earnest and begin to limit how much our state’s overall health care costs grow annually. We believe this is one of the key strategies to help Oregon families struggling with health care costs and a deeply important step towards eliminating health inequities.”

The cost growth target is 3.4% for the first 5 years going down to 3% in the next 5 years. Right now, the growth rate is 6.4%. According to Vandehey, the cost growth target could save $16 billion over the next 6 years.  

The OHA, along with the Oregon Health Leadership Council, organized a voluntary compact with entities from all silos of health care on the use of value-based payments and with it, the transparency needed to meet and enforce the cost-growth target. As of April 19, this compact has over 45 organizations and includes some of the largest health systems and insurers in the state, according to OHA.

Becky Hultberg, president and CEO of the Oregon Association of Hospitals and Health Systems, said:

“While we have voiced some concerns about the details of how HB 2081 would be implemented, Oregon’s hospitals support the goals of the Health Care Cost Growth Target program. There has been significant progress made through thoughtful discussion and collaboration, and we hope that process continues as we create a system that works for all Oregonians.” 

Lastly, Eric Hunter, CEO of CareOregon, said:

“These growth targets are an important and critical first step towards addressing these cost trends in an innovative way. We must start somewhere, and I commend the efforts to move this work along in a way that involves all of the different parts of Oregon’s health care system.”

The bill is currently in the Senate Committee On Health Care and was up for a public hearing last Monday.