OR: Medicaid Expansion Drives OHA Budget Increase in Omnibus Bill

oregon house

The Oregon Legislature passed an omnibus bill on the last day of the session to rebalance agency budgets, including increasing the Oregon Health Authority’s (OHA) budget by $1.17 billion to a total of $14.4 billion for the 2013-2015 biennium.

The increase in OHA’s budget is due to an infusion of $1.1 billion in federal funding as a result of higher-than-expected Medicaid enrollments in Oregon. As of late February, approximately 206,000 people have newly enrolled in Medicaid, either through Cover Oregon or the state’s innovative “fast-track” enrollment process.

The rebalance also reflects $67.9 million in general fund savings because of changes to caseloads, federal match rates, and the  use of one-time funds that are higher than previously forecasted.

The Legislature had little additional money to boost funding to programs.  But $26 million generated by cuts to the state’s senior medical-expense tax deduction created wiggle room for additional spending on senior programs.

The Legislature allocated $13.3 million of those savings to programs that provide geriatric mental health and addiction specialists in each county, senior transportation, and caregiver training related to Alzheimer’s and other elder-specific illnesses. The other $13 million will be appropriated this May.

The budget also reflects increased rates for adult residential facilities for substance abuse treatment.  The adult indigent (or non-Medicaid) rate increases from $105.50 to $120.00 per day, per bed – the same rate used by coordinated care organizations (CCOs).

The health authority’s budget also includes three “budget notes” written by the Ways and Means committee to direct state agencies to take specific actions or generate reports to inform future legislation.

One note instructs the OHA to work with CCOs and health systems to “ensure that Medicaid clients have access to medically appropriate and necessary inpatient or outpatient health services.”

The note specifically mentions Oregon Health and Science University (OHSU) and reflects attempts by House Speaker Tina Kotek, D-Portland, to resolve a dispute between OHSU and FamilyCare, which is one of two CCOs in the Portland area.  FamilyCare has accused OHSU of refusing to provide nonemergency care to some FamilyCare patients.

The second budget note instructs the authority to report to the Emergency Board in September 2014 regarding creating the position of a state dental director in 2015.

Finally, a note that is attached to $10 million given to the Addictions and Mental Health Division for financing affordable housing projects instructs the division, along with the National Alliance on Mental Illness and the Oregon Residential Provider Association, to provide status updates on all projects and to notify the Legislature in advance of intent to sign contracts.

Addressing primary care provider shortage

Outside of the health authority, an additional $200,000 was added to the state’s Primary Health Care Loan Forgiveness Program via the Department of Administrative Services. Operated by OHSU’s Office of Rural Health, the program forgives a portion of a primary care doctor’s medical school loans in exchange for practicing in rural and underserved areas.

It’s a far cry from the $2.5 million appropriation that Sen. Elizabeth Steiner Hayward, D-Beaverton, and many Republican legislators representing Oregon’s rural areas asked for in House Bill 4137, which died this session.

But it’s a sign of growing recognition among legislators that health reform and Medicaid expansion increase the need for primary care providers.

A recent report written by the Oregon Healthcare Workforce Committee found that demand for physicians, nurse practitioners and physicians is projected to increase between seven and 16 percent in the next decade.